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Course: STAT-212 Term: 182 Homework # 5 Material: Chapter 14 Due Date: Thursday, 24-March-2019

This document provides the details for homework assignment #5 for the STAT-212 statistics course being taken in term 182. It includes 4 questions regarding multiple linear regression analyses conducted on different datasets. Question 1 involves predicting an index of satisfaction using 6 independent variables. Question 2 examines the effects of company size and safety programs on lost work hours. Question 3 analyzes factors related to architectural firm fees. Question 4 uses 4 predictors to estimate regional automotive sales. The homework is due on March 24, 2019 and covers material from Chapter 14.

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93 views3 pages

Course: STAT-212 Term: 182 Homework # 5 Material: Chapter 14 Due Date: Thursday, 24-March-2019

This document provides the details for homework assignment #5 for the STAT-212 statistics course being taken in term 182. It includes 4 questions regarding multiple linear regression analyses conducted on different datasets. Question 1 involves predicting an index of satisfaction using 6 independent variables. Question 2 examines the effects of company size and safety programs on lost work hours. Question 3 analyzes factors related to architectural firm fees. Question 4 uses 4 predictors to estimate regional automotive sales. The homework is due on March 24, 2019 and covers material from Chapter 14.

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© © All Rights Reserved
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Course: STAT-212

Term: 182
Homework # 5
Material: Chapter 14
Due Date: Thursday, 24-March-2019

Q1: A consulting group was hired by the Human Resources Department at General Mills, Inc.
to survey company employees regarding their degree of satisfaction with their quality of life.
A special index, called the index of satisfaction, was used to measure satisfaction. Six factors
were studied, namely, age at the time of first marriage (x1), annual income (x2), number of
children living (x3), value of all assets (x4), status of health in the form of an index (x5), and the
average number of social activities per week—such as bowling and dancing (x6). Suppose the
multiple regression equation is:

ŷ = 16.24 + 0.017x1 + 0.0028x2 + 42x3 + 0.0012x4 + 0.19x5 + 26.8x6

a) What is the estimated index of satisfaction for a person who first married at 18, has an
annual income of $26,500, has three children living, has assets of $156,000, has an
index of health status of 141, and has 2.5 social activities a week on the average?
b) Which would add more to satisfaction, an additional income of $10,000 a year or two
more social activities a week?
c) Interpret the value 0.0012 from the regression equation.

Q2: A study is conducted to determine the effects of company size and the presence or absence
of a safety program on the number of hours lost due to work-related accidents. A total of 40
companies are selected for the study. The variables are as follows:

y = lost work hours


x1 = number of employees

1 safety program used


x2 = { 0 no safety program used

The following regression output was obtained:

Coefficients

Term Coef SE Coef T-Value P-Value


Constant 31.40 9.90 3.17 0.003
x1 0.01421 0.00140 10.15 0.000
x2 -54.21 7.24 -7.48 0.000

a) Interpret all the 3 coefficients i.e. 31.40, 0.01421 and -54.21.


b) Predict lost work hours for a company with 7000 employees which is using safety
program.
c) Is it reasonable to drop the dummy variable from model? Explain.
Q3: The following regression output was obtained from a study of architectural firms. The
dependent variable is the total amount of fees in millions of dollars.

Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value


Regression 5 3710.00 742 12.89 0.000
Error 46 2647.38 57.55
Total 51 6357.38

Coefficients

Term Coef SE Coef T-Value P-Value


Constant 7.987 2.967 2.690 0.010
x1 0.122 0.031 3.920 0.000
x2 -1.220 0.053 -2.270 0.028
x3 -0.063 0.039 -1.610 0.114
x4 0.523 0.142 3.690 0.001
x5 -0.065 0.040 -1.620 0.112

x1 is the number of architects employed by the company.


x2 is the number of engineers employed by the company.
x3 is the number of years involved with health care projects.
x4 is the number of states in which the firm operates.
x5 is the percent of the firm’s work that is health care–related.

a) Write out the regression equation.


b) How large is the sample? How many independent variables are there?
c) Conduct a test of hypothesis to see if any of the set of regression coefficients could be
different from 0. Use the .05 significance level. What is your conclusion?
d) Conduct a test of hypothesis for each independent variable. Use the .05 significance
level.
e) Determine the standard error of estimate. About 95% of the residuals will be between
what two values?
f) Determine the coefficient of multiple determination. Interpret this value.
g) Determine the coefficient of multiple determination, adjusted for the number of
variables and sample size.
Q4: Suppose that the sales manager of a large automotive parts distributor wants to estimate
the total annual sales for each of the company’s regions. Three factors appear to be related to
regional sales: the number of automobiles in the region registered as of April 1, the total
personal income recorded in the first quarter of the year, the average age of the automobiles
(years), and the number of sales supervisors in the region. The data for each region were
gathered for last year. For example, see the following table. In region 1 there were 9,270,000
registered automobiles in the region as of April 1, and so on. The region’s sales for that year
were $37,702,000.

Number of Personal Average


Annual Automobiles Income Age of
Sales ($ Registered ($ Automobiles Number of
millions), (millions), billions), (years), Supervisors,
y x1 x2 x3 x4
37.702 9.27 85.4 3.5 9
24.196 5.86 60.7 5 5
32.055 8.81 68.1 4.4 7
3.611 3.81 20.2 4 5
17.625 10.31 33.8 3.5 7
45.919 11.62 95.1 4.1 13
29.6 8.96 69.3 4.1 15
8.114 6.28 16.3 5.9 11
20.116 7.77 34.9 5.5 16
12.994 10.92 15.1 4.1 10

a) Using Minitab, run the linear regression to predict y based on all 4 predictors. Write out
the fitted model.
b) What percent of variation in annual sales is explained by four predictors?
c) Conduct a test of hypothesis on each of the independent variables. Which variable(s) is
significant in explaining annual sales at 5% level of significance? Explain your reason.
d) Perform the residual analysis to check if there is violation of any assumption(s).
e) If the model is denoted by 𝑦 = 𝛽0 + 𝛽1 𝑋1 + 𝛽2 𝑋2 + 𝛽3 𝑋3 + 𝛽4 𝑋4 + 𝜖 then test the
hypothesis 𝐻0 : 𝛽3 = 𝛽4 = 0 against 𝐻1 : At least one is significantly different from zero.
Use Partial F-test with 5% level of significance. Clearly write out the test statistic,
decision rule, critical value, decision and conclusion.

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