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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*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
                                                      lieu of your academic submissions for grades.
              Sub: Statistics                                                                         Topic: Regression


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                                                                www.classof1.com


*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
                                                      lieu of your academic submissions for grades.
              Sub: Statistics                                                                         Topic: Regression


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