lOMoARcPSD|37282239

Module 10 SLR

statics (Holy Angel University)

Scan to open on Studocu

Studocu is not sponsored or endorsed by any college or university

Downloaded by elle alncstr ([email protected])
 lOMoARcPSD|37282239

1. The Insurance Institute for Highway Safety has listed the following ratings based on
collision and comprehensive claims for nine makes of midsize four-door cars from 2014-
2016 model years. Higher numbers reflect higher claims in the collision and
comprehensive categories of coverage. Describe the direction and degree of
relationship; and at a .05 alpha, is there significant relationship between collision claim
rating and comprehensive claim rating?

1. Determine the slope value.

2. Determine the y-intercept value.
3. Develop the linear regression equation or model.
4. Predict the comprehensive claim rating for a collision rating of 130.
5. Describe the coefficient of correlation.
6. Describe the coefficient of determination.

Claims Collision claim Comprehensive X*Y 𝑿𝟐 𝒀𝟐

rating (X) claim rating (Y)

1 113 89 10,057 12,769 7,921

2 108 91 9,828 11,664 8,281

3 124 92 11,408 15,376 8,464

4 131 108 14,148 17,161 11,664

5 128 108 13,824 16,384 11,664

6 90 74 6,660 8,100 5,476

7 99 79 7,821 9,801 6,241

8 106 86 9,116 11,236 7,396

9 116 98 11,368 13,456 9,604

Total 1,015 825 94,230 115,947 76,711

𝒏 ∑ 𝒙𝒚−∑ 𝒙 ∑ 𝒚
1. Slope =
𝒏 ∑ 𝒙𝟐 −(∑ 𝒙)𝟐

Downloaded by elle alncstr ([email protected])

 lOMoARcPSD|37282239

𝟗(𝟗𝟒, 𝟐𝟑𝟎) − (𝟏, 𝟎𝟏𝟓)(𝟖𝟐𝟓)

𝟗(𝟏𝟏𝟓, 𝟗𝟒𝟕) − (𝟏, 𝟏𝟎𝟏𝟓)𝟐
𝟖𝟒𝟖, 𝟎𝟕𝟎 − 𝟖𝟑𝟕, 𝟑𝟕𝟓
𝟏, 𝟎𝟒𝟑, 𝟓𝟐𝟑 − 𝟏, 𝟎𝟑𝟎, 𝟐𝟐𝟓
𝟏𝟎, 𝟔𝟗𝟓
𝟏𝟑, 𝟐𝟗𝟖
𝟎. 𝟖𝟎
∑ 𝒚−𝒃 ∑ 𝒙
2. Y-intercept =
𝒏
𝟖𝟐𝟓 − (. 𝟖𝟎)(𝟏, 𝟎𝟏𝟓)
𝟗
𝟖𝟐𝟓 − 𝟖𝟏𝟐
𝟗
𝟏𝟑
𝟗
𝟏. 𝟒𝟒
3. Linear Regression Model 𝒀 = 𝟏. 𝟒𝟒+. 𝟖𝟎𝑿
4. 𝒀 = 𝟏. 𝟒𝟒 + 𝟎. 𝟖𝟎𝒙
𝒀 = 𝟏. 𝟒𝟒 + 𝟎. 𝟖𝟎(𝟏𝟑𝟎)
𝒀 = 𝟏. 𝟒𝟒 + 𝟏𝟎𝟒
𝒀 = 𝟏𝟎𝟓. 𝟒𝟒
5.
𝒏(∑ 𝒙𝒚) − (∑ 𝒙) ∗ (∑ 𝒚)
√𝒏(∑ 𝒙)𝟐 − (∑ 𝒙)𝟐 ∗ √𝒏(∑ 𝒚)𝟐 − (∑ 𝒚)𝟐
𝟗(𝟗𝟒, 𝟐𝟑𝟎) − (𝟏, 𝟎𝟏𝟓) ∗ (𝟖𝟐𝟓)
√𝟗(𝟏𝟏𝟓, 𝟗𝟒𝟕) − (𝟏, 𝟎𝟏𝟓)𝟐 ∗ √𝟗(𝟕𝟔, 𝟕𝟏𝟏) − (𝟖𝟐𝟓)𝟐
𝟖𝟒𝟖, 𝟎𝟕𝟎 − 𝟖𝟑𝟕, 𝟑𝟕𝟓
√𝟏, 𝟎𝟒𝟑, 𝟓𝟐𝟑 − 𝟏, 𝟎𝟑𝟎, 𝟐𝟐𝟓 ∗ √𝟔𝟗𝟎, 𝟑𝟗𝟗 − 𝟔𝟖𝟎, 𝟔𝟐𝟓
𝟏𝟎, 𝟔𝟗𝟓
√𝟏𝟑, 𝟐𝟔𝟖 ∗ √𝟗, 𝟕𝟕𝟒
𝟏𝟎, 𝟔𝟗𝟓
𝟏𝟏𝟓. 𝟑𝟏𝟔𝟗𝟓𝟒𝟓 ∗ 𝟗𝟖. 𝟖𝟔𝟑𝟓𝟒𝟐𝟑𝟐

Downloaded by elle alncstr ([email protected])

 lOMoARcPSD|37282239

𝟏𝟎, 𝟔𝟗𝟓
𝟏𝟏, 𝟒𝟎𝟎. 𝟔𝟒𝟐𝟔𝟏𝟏𝟒
𝟎. 𝟗𝟑𝟖𝟏
There is a high positive correlation between the number of collision claim ratings
and the comprehensive claim ratings.

6. 𝒓𝟐 = (𝟎. 𝟗𝟑𝟖𝟏)𝟐 = 𝟎. 𝟖𝟖𝟎𝟎 𝒐𝒓 𝟖𝟖%

The 𝑟 2 value suggests that 88% of the changes in the comprehensive claim
ratings can be explained by the changes in collision claim ratings, and the
remaining 12% are caused by other unexplained factors.

2. A mail-order catalog business that sells personal computer supplies, software, and
hardware maintains a centralized warehouse for the distribution of products ordered.
Management is currently examining the process distribution from the warehouse and is
interested in studying the factors that affect warehouse distribution costs. Currently, a
small handling fee is added to the order, regardless of the amount. The table below shows
the data (distribution costs in thousands of dollars and number of orders) collected for the
past 12 months. Describe the direction and degree of relationship of the two variables;
and at a .01 alpha, is there significant relationship between distribution costs and number
of orders?

1. Determine the slope value.

2. Determine the y-intercept value.
3. Develop the linear regression equation or model.
4. Predict the number of orders for a distribute costs of 90.25 (in thousand dollars)
5. Describe the coefficient of correlation.
6. Describe the coefficient of determination.

Month Distribution Number of X*Y 𝑿𝟐 𝒀𝟐

costs orders

1 52.95 4015 212,594.25 2,803.70 16,120,225

2 71.66 3806 272,737.96 5,135.16 14,485,636

3 85.58 5309 454,344.22 7,323.94 28,185,481

4 63.69 4262 271,446.78 4,056.42 18,164,644

Downloaded by elle alncstr ([email protected])

 lOMoARcPSD|37282239

5 72.81 4296 312,791.76 5,301.30 18,455,616

6 68.44 4097 280,398.68 4,684.03 16,785,409

7 52.46 3213 168,553.98 2,752.05 10,323,369

8 70.77 4809 340,332.93 5,008.39 23,126,481

9 82.03 5237 429,591.11 6,728.92 27,426,169

10 74.39 4732 352,013.48 5,533.87 22,391,824

11 70.84 4413 312,616.92 5,018.31 19,474,569

12 54.08 2921 157,967.68 2,924.65 8,532,241

Total 819.70 51,110 3,565,389.75 57,270.73 223,471,664

𝒏 ∑ 𝒙𝒚−∑ 𝒙 ∑ 𝒚
1. Slope = 𝒏 ∑ 𝒙𝟐 −(∑ 𝒙)𝟐

𝟏𝟐(𝟑, 𝟓𝟔𝟓, 𝟑𝟖𝟗. 𝟕𝟓) − (𝟖𝟏𝟗. 𝟕)(𝟓𝟏, 𝟏𝟏𝟎)

𝟏𝟐(𝟓𝟕, 𝟐𝟕𝟎. 𝟕𝟑) − (𝟖𝟏𝟗. 𝟕)𝟐

𝟒𝟐, 𝟕𝟖𝟒, 𝟔𝟕𝟕 − 𝟒𝟏, 𝟖𝟗𝟒, 𝟖𝟔𝟕

𝟔𝟖𝟕, 𝟐𝟒𝟖. 𝟕𝟔 − 𝟔𝟕𝟏, 𝟗𝟎𝟖. 𝟎𝟗

𝟖𝟖𝟗, 𝟖𝟏𝟎
𝟏𝟓, 𝟑𝟒𝟎. 𝟔𝟕

𝟓𝟖
∑ 𝒚−𝒃 ∑ 𝒙
2. Y-intercept = 𝒏

𝟓𝟏, 𝟏𝟏𝟎 − (𝟓𝟖)(𝟖𝟏𝟗. 𝟕)

𝟏𝟐

𝟓𝟏, 𝟏𝟏𝟎 − 𝟒𝟕, 𝟓𝟒𝟐. 𝟔

𝟏𝟐

Downloaded by elle alncstr ([email protected])

 lOMoARcPSD|37282239

𝟑, 𝟓𝟔𝟕. 𝟒
𝟏𝟐
𝟐𝟗𝟕. 𝟐𝟖

3. Linear Regression Model 𝒀 = 𝟐𝟗𝟕. 𝟐𝟖 + 𝟓𝟖𝑿

4. 𝒀 = 𝟐𝟗𝟕. 𝟐𝟖 + 𝟓𝟖𝒙
𝒀 = 𝟐𝟗𝟕. 𝟐𝟖 + 𝟓𝟖(𝟗𝟎. 𝟐𝟓)
𝒀 = 𝟐𝟗𝟕. 𝟐𝟖 + 𝟓, 𝟐𝟑𝟒. 𝟓
𝒀 = 𝟓, 𝟓𝟑𝟏. 𝟕𝟖
5.
𝒏(∑ 𝒙𝒚) − (∑ 𝒙) ∗ (∑ 𝒚)
√𝒏(∑ 𝒙)𝟐 − (∑ 𝒙)𝟐 ∗ √𝒏(∑ 𝒚)𝟐 − (∑ 𝒚)𝟐
𝟏𝟐(𝟑, 𝟓𝟔𝟓, 𝟑𝟖𝟗. 𝟕𝟓) − (𝟖𝟏𝟗. 𝟕𝟎) ∗ (𝟓𝟏, 𝟏𝟏𝟎)
√𝟏𝟐(𝟓𝟕, 𝟐𝟕𝟎. 𝟕𝟑) − (𝟖𝟏𝟗. 𝟕𝟎)𝟐 ∗ √𝟏𝟐(𝟐𝟐𝟑, 𝟒𝟕𝟏. 𝟔𝟔𝟒) − (𝟓𝟏, 𝟏𝟏𝟎)𝟐
𝟒𝟐, 𝟕𝟖𝟒, 𝟔𝟕𝟕 − 𝟒𝟏, 𝟖𝟗𝟒, 𝟖𝟔𝟕
𝟏𝟐𝟑. 𝟖𝟓𝟕𝟒𝟓𝟖𝟑𝟗𝟒 ∗ 𝟖, 𝟑𝟑𝟐. 𝟑𝟑𝟖𝟔𝟖𝟕
𝟖𝟖𝟗, 𝟖𝟏𝟎
𝟏, 𝟎𝟑𝟐, 𝟎𝟐𝟐. 𝟐𝟗𝟐𝟐𝟒
𝟎. 𝟖𝟔𝟐𝟐
There is a high positive correlation between the distribution cost and the number
of orders.

6. 𝒓𝟐 = (𝟎. 𝟖𝟔𝟐𝟐)𝟐 = 𝟎. 𝟕𝟒𝟑𝟒 𝒐𝒓 𝟕𝟒. 𝟑𝟒%

The 𝑟 2 value suggests that 74.34% of the changes in the number of orders can
be explained by the changes in distribution costs and the remaining 25.66% are
caused by other unexplained factors.

Downloaded by elle alncstr ([email protected])