# Regression-equation -v2 by ClassOf1

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```									              Sub: Statistics                                                                         Topic: Regression

Question:

Deriving the regression equation, testing the model fit and obtains confidence
interval for estimated values.

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The Apex Corporation produces corrugated paper. It has collected monthly data from January
2001 through March 2003 on the following two variables:

y, total manufacturing cost per month (in thousands of dollars) (COST)

x, total machine hours used per month (MACHINE)

Data shown below: Perform any analysis necessary to answer the following questions:

a. What is the estimated regression equation relating y to x?
b. What percentage of the variation in y has been explained by the regression?
c. Are y and x linearly related? Conduct a hypothesis test to answer this question and use a
5% level of significance. State the hypotheses to be tested, the decision rule, the test
statistic, and your decision. What conclusion can be drawn from the result of the test?
d. Use the equation developed to estimate the average manufacturing cost in a month
with 350 machine hours. Find a point estimate and a 95% confidence interval estimate.
How reliable do you believe this forecast might be?
e. Use the equation developed to estimate the average manufacturing cost in a month
with 550 machine hours. Find a point estimate and a 95% confidence interval estimate.
How reliable do you believe this forecast might be?
COST                                 MACHINE

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Sub: Statistics                                                                         Topic: Regression

1102                                 218

1008                                 199

1227                                 249

1395                                 277

1710                                 363

1881                                 399

1924                                 411

1246                                 248

1255                                 259

1314                                 266

1557                                 334

1887                                 401

1204                                 238

1211                                 246

1287                                 259

1451                                 286

1828                                 389

1903                                 404

1997                                 430

1363                                 271

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*The Homework solutions from ClassOf1 are intended to help the student understand the approach to solving the problem and not for submitting the same in