1 Model Weight (lbs)

Fierro 7b 17.9
HX 5000 16.2
Durbin Ultralight 15.0
Schmidt 16.0
WSilton Advanced 17.3
bicyclette velo 13.2
Supremo Team 16.3
XTC Racer 17.2
D'Onofrio Pro 17.7
Americans #6 14.2

a. Develop a scatter chart with weight as the independent variable

the relationship between the weight and price of these bicycles?
 There is a negative or inverse relationship between the weight and the prices of

b. Use the data to develop an estimated regression equation that c

bicycle, given its weight. What is the estimated regression mode

y = -1439.0064 x + 28818.0037

c.
Test whether each of the regression parameters B0 and B1 is equ
are the correct interpretations of the estimated regression param

T-test
H0: B1 = 0
Ha: B1 ≠ 0

Level of significance = 0.05

d. How much of the variation in the prices of the bicycles in the sam
in part b explain?

Because the R square is equal to 0.8637, it means that 86.37% of the variation in
The remaining 13.63% is unexplained.
e.
The manufacturers of the D'Onofrio Pro plan to introduce the 15
Use the regression model you estimated in part a to predict the

y = -1439.0064 x + 28818.0034

Price = 28818.0037 - 1439.0064(weight)

Price = 28818.0037 - 1439.0064 (15)
Price = $7232.9077
 Price ($) SUMMARY OUTPUT
2200
6350 Regression Statistics
8470 Multiple R 0.929366408
6300 R Square 0.8637219202
4100 Adjusted R 0.8466871603
8700 Standard E 942.26605446
6100 Observatio 10
2680
3500 ANOVA
8100 df SS MS
Regression 1 45017877.4609 45017877
Residual 8 7102922.5391 887865.32
Total 9 52120800

Coefficients Standard Error t Stat

Intercept 28818.00368 3267.25683943 8.8202444
Weight (lbs-1439.0064397 202.089512328 -7.1206389

ight as the independent variable. What does the scatter chart indicate about
eight and price of these bicycles? Weight vs. Price
10000

9000

8000

7000

6000

5000

4000

3000

2000

1000

0
12.0 13.0 14.0 15.0 16.0 17.0 18.0
 5000

4000

3000

2000

1000

0
12.0 13.0 14.0 15.0 16.0 17.0 18.0

ip between the weight and the prices of the bicycles. As one variable increases, the other decreases and vice versa.

mated regression equation that could be used to estimate the price for a
s the estimated regression model?

sion parameters B0 and B1 is equal to zero at a 0.05 level of signifacance. What

of the estimated regression parameters? Are these interpretations reasonable?

0.00009993 < 0.05

Reject the null hypothesis
The mean price of the bicycle is not equal to 0 when the weight is 0.

e prices of the bicycles in the sample does the regression model you estimated

, it means that 86.37% of the variation in price can be explained by the weight.
ofrio Pro plan to introduce the 15-pound D'Onofrio Elite bicycle later this year.
stimated in part a to predict the price of the D'Onofrio Elite

037 - 1439.0064(weight)
037 - 1439.0064 (15)
 F Significance F
50.7034981311966 9.993745E-05

P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%

0.0000214888426812320 21283.695897 36352.311 21283.6959 36352.311462
0.0000999374473172134 -1905.025691 -972.9872 -1905.02569 -972.9871886

Price

0.05

reject

16.0 17.0 18.0 19.0

 16.0 17.0 18.0 19.0

and vice versa.

 Linear Regression

2
In a manufacturing process the assembly line speed (feet per minute) was
thought to affect the number of defective parts found during the inspection
process. To test this theory, managers devised a situation in which the same
batch of parts was inspected visually at a variety of line speeds. They
collected the following data:

Line Speed Number of Defective

(ft/min) Part Found

20 21
20 19
40 15
30 16
60 14
40 17

Develop a scatter chart with line speed aas the independent

a. variable, What does the scatter chart indicate about the
relationship between line speed and the number of defective parts
found?

b. Use the data to develop an estimated regression equation that

could be used to predict the number of defective parts found, given
the line speed. What is the estimated regression model?

c.

Test whether each of the regression parameters B0 and B1 is equal

to zero at a 0.01 level of signifacance. What are the correct
interpretations of the estimated regression parameters? Are these
interpretations reasonable?
 Test whether each of the regression parameters B0 and B1 is equal
to zero at a 0.01 level of signifacance. What are the correct
interpretations of the estimated regression parameters? Are these
interpretations reasonable?

d. How much of the variation in the number of defective parts found for the samp
data does the model you estimated in part b explain?

The coefficient of
determination (R2) =
0.739, this implies that
R2 is 0.739. This means 73.9% of variability in
that 73.9% of the dependent variable i.e.
variation in the number
of defective parts can be Number of Defective
explained by line speed. Parts found can be
Therefore, the model is explained by Line Speed
alone. Hence, we can say
able to explain 73.9% of that we will be able to
the variance in defective
explain 74% of variance
parts. in dependent variable
i.e. Number of Defective
Parts found.
 Number of
Line speed Defective Part
Found
20 21
20 19
40 15
30 16
60 14
40 17

It indicates a negative linear

relationship between line speed
and number of defective parts
found. This is because of the
downward slope where the
increase of one leads to a decrease
in another

Number of
y = -0.1478 x + defective found =
22.174 22.174 -0.1478
line speed

Step 1: Step 3:
Ho: B1 =0 Ttest:
 H1: B1 /=0 DF:4 Ttest

Step 2

Level of
significance: b1 0.054343821260377 -0.349995995
0.01

When we look at B1=(0.054, -0.4) none of them

have the exact value of 0. This means that B1 is not
arts found for the sample equal to 0. We reject the null hypothesis. This
b explain?
means that the line speed in the regression model
is a better predictor.
SUMMARY OUTPUT

Regression Statistics
Multiple R 0.859727
R Square
Adjusted R Square 0.673913
Standard Error 1.489091

Observations 6

ANOVA
df SS MS F Significance F
Regression 1 25.13043 25.13043 11.33333 0.028135

Residual 4 8.869565 2.217391

Total 5 34

Coefficients
Standard Error t Stat P-value Lower 95%Upper 95%Lower 99.0%
Upper 99.0%

Intercept 22.17391 1.652746 13.41641 0.000179 17.58515 26.76267 14.56451 29.78331

Line speed -0.147826 0.043911 -3.366502 0.028135 -0.269742 -0.02591 -0.349996 0.054344

25

Step 4:
20
f(x) = − 0.147826086956522 x + 22.1739130434783
er of defectives

15

10
 25

Conclusion: 20
0.028135 > 0.01 there is no f(x) = − 0.147826086956522 x + 22.1739130434783
relationship

Number of defectives
Fail to reject null 15
hypothesis

10

0
15 20 25 30 35 40 45 50 55 60 65

Line speed
Upper 99.0%

739130434783

Number of Defective
Part Found
Linear (Number of
739130434783

Number of Defective
Part Found
Linear (Number of
Defective Part Found)

50 55 60 65
 Multiple Regression
9
Dixie Showtime Movie Theaters, Inc., owns and operates a chain of cinemas in seeral mar
States. The owners would like to estimate weekly gross revenue as a fucntion of advertisin
sample of eight markets for a recent week follows:

y - dependent

Market Weekly Gross Revenue

($100s)

Mobile 101.3
Shreveport 51.9
Jackson 74.8
Birmingham 126.2
Little Rock 137.8
Biloxi 101.4
New Orleans 237.8
Baton Rouge 219.6

Develop an estimated regression equation with the amount of television a

a. variable. Test for a significant relationship between television advertising a
0.05 level of significance. What is the interpretation of this

ŷ = 40.06x - 45.43
Ho β1 = 0 P-value
Ha β1 ≠ 0
The regression parameters is not equal to 0 which could mean that
there is a relationship between television advertising and weekly gross re

b. How much of the variation in the sample values of weekly gross revenue do
explain?
55.5% of the variation in the sample values of weekly gross revenue ca
advertising.

c.
Develop an estimated regression equation with both television advertising
the independent variables. Is the overall regression statistically significant a
significance? If so, then test whether each of the regression parameters Bo
a ).05 level of significance. What are the correct interpretation of the estim
Are these interpretations reasonable?
 Develop an estimated regression equation with both television advertising
the independent variables. Is the overall regression statistically significant a
significance? If so, then test whether each of the regression parameters Bo
a ).05 level of significance. What are the correct interpretation of the estim
Are these interpretations reasonable?

ŷ = 22.40x1 + 19.50x2 - 42.57

where x1 = Television Advertising, x2 = Newspaper Advertising
Ho β1 = β2 = 0 P-value
Ha One or more of the parameters is ≠ 0
Model
Television Advertising
Newspaper Advertising
The regression parameters are not equal to 0 which could mean that ther
between television advertising, newspaper advertising, and weekly gross

d. How much of the variation in the sample values of weekly gross revenue do
explain?
93.2% of the variation in the sample values of weekly gross revenue can b
newspaper and television advertising.

e.
Given the results in parts a and c, what should your next step be? Explain.
Based from the results in parts a and c, I believe that management should
coefficients for both television and newspaper advertising. If they use telev
there would be an increase of $40 in weekly gross revenue for every $100
If both television and newspaper are used, television would still yield a high
which is only $19 for every $100k investment. Because of this, the compan
heavily on television advertisements.

f. What are the managerial implications of these results?

The managerial implications of this is that television advertising will genera
resources will be used to create succesful television advertisements that w
They must also figure out whether or not the additional costs and time tha
they receive the $22 return compared with newspaper advertising's $19 re
Regression

s a chain of cinemas in seeral markets in the southern United

revenue as a fucntion of advertising expenditures. Data for a

x - independent x - independent
Newspaper
Television Advertising
Advertising ($100s) (100s)
5.0 1.5 SUMMARY OUTPUT
3.0 3.0
4.0 1.5 Regression Statistics
4.3 4.3 Multiple R
3.6 4.0 R Square
3.5 2.3 Adjusted R Square
5.0 8.4 Standard Error
6.9 5.8 Observations

on with the amount of television advertising as the independent

p between television advertising and weekl gross revenue at the ANOVA
e. What is the interpretation of this relationship?

0.033889854623303 < 0.05 Regression

Reject Ho Residual
to 0 which could mean that Total
n advertising and weekly gross revenue.
Coefficients
values of weekly gross revenue does the model in part a Intercept
Television Advertisi

values of weekly gross revenue can be explained by television

advertising.

SUMMARY OUTPUT
on with both television advertising and newspaper advertising as
regression statistically significant at the 0.05 level of
h of the regression parameters Bo,B1 and B2 is equal to zero at
correct interpretation of the estimated regression parameters?
 Regression Statistics
ewspaper Advertising Multiple R
0.001195642135594 < 0.05 R Square
Reject Ho Adjusted R Square
Interpretatio
P-Value n
Standard Error
0.025221228693859 Reject Ho Observations
0.003260338968859 Reject Ho
l to 0 which could mean that there is a relationship ANOVA
per advertising, and weekly gross revenue.
Regression
values of weekly gross revenue does the model in part c Residual
Total
ues of weekly gross revenue can be explained by both the
Coefficients
Intercept
Television Advertisi
hould your next step be? Explain.
Newspaper Advertis
believe that management should look closely on the
paper advertising. If they use television advertising alone,
ekly gross revenue for every $100 investment.
d, television would still yield a higher increase of $22 over newspaper
ment. Because of this, the company should focus on investing

these results?
t television advertising will generally incur more costs than the $100k investment and higher
l television advertisements that will yield the $22 weekly gross revenue.
t the additional costs and time that they will use up in television advertising will be worth it once
th newspaper advertising's $19 return.
 Weekly Gross Revenue vs. TV Advertising
250.0

f(x) = 40.0639886242446 x − 45.4323498044792

ARY OUTPUT 200.0

egression Statistics 150.0

0.745108
0.555185 100.0
0.48105
47.5499 50.0
8
0.0
2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 7.0 7.5

df SS MS F Significance F
1 16932.04 16932.04 7.488765 0.03389
6 13565.96 2260.993
7 30498

Coefficients
Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0%
Upper 95.0%
-45.43235 66.75185 -0.680616 0.521499 -208.7682 117.903532 -208.7682 117.9035
40.06399 14.64027 2.736561 0.03389 4.240538 75.8874391 4.240538 75.88744

ARY OUTPUT
egression Statistics
0.96552
0.93223
0.905121
20.33157
8

df SS MS F Significance F
2 28431.14 14215.57 34.38922 0.001196
5 2066.864 413.3727
7 30498

Coefficients
Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0%
Upper 95.0%
-42.56959 28.54717 -1.491202 0.196107 -115.9524 30.8132536 -115.9524 30.81325
22.40224 7.099332 3.155542 0.025221 4.152825 40.6516517 4.152825 40.65165
19.49863 3.696947 5.274252 0.00326 9.995324 29.0019311 9.995324 29.00193

and higher

e worth it once
7.0 7.5

SUMMARY OUTPUT

Regression Statistics
Multiple R 0.892897
R Square 0.797265
Adjusted R 0.763476
Standard E 32.1014
Observatio 8

ANOVA
df SS MS F Significance F
Regression 1 24315 24315 23.59534 0.00283

Residual 6 6183 1030.5

Total 7 30498

CoefficientStandard Et Stat P-value Lower 95%Upper 95%Lower 95. Upper 95.0%

Intercept 35.09505 22.83584 1.536841 0.175244 -20.78222 90.97233 -20.78222 90.97233
Newspaper 25.00129 5.146941 4.857504 0.00283 12.40717 37.5954 12.40717 37.5954
Upper 95.0%
 Multiple Regression

10
Resorts & Spas, a magazine devoted to upscale vacations and
accommodations, published its Reader's Choice LIst of the top 20
independent beachfront boutique hotels in the world. The data shown are
the scores received by these hotels based on the results form Resorts &
Spas' annual Readers' Choice Survey. Each score represents the percentage
of respondents who rated a hotel as excellent or very good on one of three
criteria (comfort, amenities, and in-house dining). An overall score was also
reported and used to rank the hotels. The highest ranked hotel, the Muri
Beach Odyssey, has an overall score of 94.3, the highest component of
which is 97.7 for in-house dining.

Hotel Overall Comfort AmenitiesIn-House Dining

Muri Beach Odyssey 94.3 94.5 90.8 97.7

Pattaya Resort 92.9 96.6 84.1 96.6
Sojourner’s Respite 92.8 99.9 100.0 88.4
Spa Carribe 91.2 88.5 94.7 97.0
Penang Resort and Spa 90.4 95.0 87.8 91.1
Mokihana Hōkele 90.2 92.4 82.0 98.7
Theo’s of Cape Town 90.1 95.9 86.2 91.9
Cap d’Agde Resort 89.8 92.5 92.5 88.8
Spirit of Mykonos 89.3 94.6 85.8 90.7
Turismo del Mar 89.1 90.5 83.2 90.4
Hotel Iguana 89.1 90.8 81.9 88.5
Sidi Abdel Rahman Palace 89.0 93.0 93.0 89.6
Sainte-Maxime Quarters 88.6 92.5 78.2 91.2
Rotorua Inn 87.1 93.0 91.6 73.5
Club Lapu-Lapu 87.1 90.9 74.9 89.6
Terracina Retreat 86.5 94.3 78.0 91.5
Hacienda Punta Barco 86.1 95.4 77.3 90.8
Rendezvous Kolocep 86.0 94.8 76.4 91.4
Cabo de Gata Vista 86.0 92.0 72.2 89.2
Sanya Deluxe 85.1 93.4 77.3 91.8
a. Determine the estimated multiple linear regression equation that
can be used to predict the overall score given the scores for
comfort, amenitie, and in-house dining.
b. Use the F-test to determine the overall significance of the
regression relationship. What is the conclusion at the 0.01 level of
significance?
c. Use the t test to determine the significance of each independent
variable. What is the conclusion for each test at the 0.01 level of
significance?
d. Remove all independent variables that are not significant at the
0.01 level of significane from the estimated regression equation.
What is your recommended estimated regression equation?
a.) SUMMARY OUTPUT

Regression Statistics
Multiple R 0.8658955
R Square 0.7497751
Adjusted R Squ0.7028579
Standard Error 1.3878733
Observations 20

ANOVA
df SS MS F

Regression 3 92.346423178009 30.7821410593363 15.98082447

Residual 16 30.8190768219912 1.92619230137445

Total 19 123.1655

Coefficients Standard Error t Stat P-value

Overall 35.696736 13.2153829624529 2.70115036269289 0.015734886
Comfort 0.1093485 0.12971877076673 0.8429661093258 0.411672372
Amenities 0.244268 0.04331545809221 5.63928013097772 3.694538E-05
In-House Dinin 0.2474312 0.06212368979957 3.98287992688806 0.001069855

Multiple linear regression equation 35.69 + 0.109x1 + 0.244x2 + 0.247x3

b.) From the provided information, the overall scores are the dependent variables, a
the comfort, amenities, and in-house dining scores are the independent variables

To determine the overall significance of the regression relationship:

Ho: There is no significant overall regression relationship present
Ha: There is a significant overall regression relationship present
F-test:
F-statistics = 15.9808244677
P-value = 4.523864E-05
 α = 0.01
Since the P-value is less than the level of significance, the null hypothesis should be
There is enough evidence to conclude that a significant overall regression
relationship between the independent and dependent variables is present.

c.) To determine the significance of each independent variable:

Ho: A statistical significant relationship does not exist
Ha: A statistical significant relationship does exist

T-test:
Independent variable 1: Comfort
P-value = 0.4116723722
α = 0.01
Since the P-value is greater than the level of significance, the
There is enough evidence to conclude that a statistical signific

Independent variable 2: Amenities

P-value = 3.6945381E-05
α = 0.01
Since the P-value is less than the level of significance, the null
There is enough evidence to conclude that a statistical signific

Independent variable 3: In-house Dining

P-value = 0.0010698546
α = 0.01
Since the P-value is less than the level of significance, the null
There is enough evidence to conclude that a statistical signific

d.) SUMMARY OUTPUT

Regression Statistics
Multiple R 0.8594545
R Square 0.7386621
Adjusted R Squ0.7079165
Standard Error 1.376009
Observations 20

ANOVA
df SS MS F
Regression 2 90.9776866050227 45.4888433025113 24.02494157
Residual 17 32.1878133949776 1.89340078793986
Total 19 123.1655

Coefficients Standard Error t Stat P-value

Overall 45.146149 6.93935059661844 6.50581754725778 5.384213E-06
Amenities 0.2525806 0.04181749205399 6.04006935990006 1.325239E-05
In-House Dinin 0.2482657 0.06158480246664 4.0312815425233 0.000866459

Multiple linear regression equation =45.1461 + 0.2525x1 + 0.2482x2

 a. Determine the estimated multiple linea
can be used to predict the overall score
comfort, amenitie, and in-house dining
b. Use the F-test to determine the overal
regression relationship. What is the co
significance?
c. Use the t test to determine the signific
variable. What is the conclusion for eac
significance?
d. Remove all independent variables that
0.01 level of significane from the estim
What is your recommended estimated
Significance F

4.523864E-05

Lower 95% Upper 95% Lower 99.0% Upper 99.0%

7.6813761088 63.712097 -2.90251121 74.29598417
-0.165642982 0.38434 -0.26953167 0.488228729
0.152443333 0.3360927 0.11775301 0.370782996
0.1157348579 0.3791275 0.06598147 0.428880929

+ 0.244x2 + 0.247x3

the dependent variables, and

e the independent variables.

n relationship:
on relationship present
relationship present
he null hypothesis should be rejected.
t overall regression
variables is present.

es not exist

he level of significance, the null hypothesis should be accepted.

ude that a statistical significant relationship does not exist.

evel of significance, the null hypothesis should be rejected.

ude that a statistical significant relationship does exist.

evel of significance, the null hypothesis should be rejected.

ude that a statistical significant relationship does exist.
 Significance F
1.112296E-05

Lower 95% Upper 95% Lower 99.0% Upper 99.0%

30.505398889 59.786899 25.0343112 65.25798656
0.1643533563 0.3408077 0.13138382 0.373777284
0.1183331019 0.3781983 0.06977872 0.426752632

+ 0.2482x2
 estimated multiple linear regression equation that
predict the overall score given the scores for
tie, and in-house dining.
o determine the overall significance of the
tionship. What is the conclusion at the 0.01 level of
o determine the significance of each independent
is the conclusion for each test at the 0.01 level of
ependent variables that are not significant at the
nificane from the estimated regression equation.
commended estimated regression equation?
SUMMARY OUTPUT

Regression Statistics
Multiple R 0.818606797378511
R Square 0.670117088714303
Adjusted R Square 0.608264042848235
Standard Error 32446.8744689261
Observations 20

ANOVA
df SS MS
Regression 3 34218155395.16 1.14E+10
Residual 16 16844794604.84 1.05E+09
Total 19 51062950000

Coefficients Standard Error t Stat

Intercept -143481.192413645 39925.59539973 -3.593715
Education (No. of years) 10011.9212403369 2570.584809034 3.894803
Length of tenure in current employment (No. of years) -2193.88376370611 2158.829052634 -1.016238
Age (No. of years) 2689.24051661598 986.3534294036 2.726447

Ho: There is no significant overall regression relations

Ha: There is a significant overall regression relationsh

F-test:
F-statistics = 10.83401923594
P-value = 0.000393506606
α = 0.05
Conclusion = Reject

Since the P-value is less than the level of significance, we reject the
with that we can conclude that there is a significant relationship bet

To determine the significance of each independent variable:

Ho: A statistical significant relationship doe
Ha: A statistical significant relationship doe

T-test:
Independent variable 1: Education (No. of
P-value =
α =
Since the P-value is less th
 There is enough evidence

Independent variable 2: Length of tenure in

P-value =
α =
Since the P-value is great
There is enough evidence

Independent variable 3: Age (No. of years)

P-value =
α =
Since the P-value is less th
There is enough evidence
 F Significance F
10.83402 0.000393506606

P-value Lower 95% Upper 95%Lower 95.0%

Upper 95.0%
0.002431 -228119.673676 -58842.71 -228120 -58842.71
0.001288 4562.524881568 15461.32 4562.525 15461.32
0.324638 -6770.3969125 2382.629 -6770.397 2382.629
0.01494 598.2646547183 4780.216 598.2647 4780.216

l regression relationship present

regression relationship present

significance, we reject the null hypothesis,

significant relationship between dependent and independent variables.

ependent variable:
significant relationship does not exist
ignificant relationship does exist

iable 1: Education (No. of years)

0.001288 Reject
0.05
Since the P-value is less than the level of significance, the null hypothesis should be rejected.
There is enough evidence to conclude that there is a relationship between education and annual income.

iable 2: Length of tenure in current employment (No. of years)

0.324638 Do not reject
0.05
Since the P-value is greater than the level of significance, the null hypothesis should be accepted.
There is enough evidence to conclude that length of tenure in current employment has nothing to do with the annual income of the emp

iable 3: Age (No. of years)

0.01494 Reject
0.05
Since the P-value is less than the level of significance, the null hypothesis should be rejected.
There is enough evidence to conclude that there is a relationship between the age and annual income.
ith the annual income of the employee.
Education (No. of years) Length of tenure in current employment (No. of years)
17 8
12 12
20 9
14 4
12 1
14 9
12 8
18 10
16 12
11 7
16 14
12 4
16 17
13 7
11 6
20 4
19 7
16 12
12 2
10 6

Education (No. of years)

Education (No. of years) 1
Length of tenure in current employment (No. 0.311351475066741
Age (No. of years) 0.353300091649462
Annual Income 0.718048097122027
Age (No. of years) Annual Income
40 124,000
41 30,000
44 193,000
42 88,000
19 27,000
28 43,000
43 96,000
37 110,000
36 88,000
39 36,000
36 81,000
22 38,000
45 140,000
42 11,000
18 21,000
40 151,000
35 124,000
38 48,000
19 26,000
44 124,000

Length of tenure in current employment (No. of years) Age (No. of years)

1
0.513264060000229 1
0.257326728366329 0.595155734129572
Annual Income