(Solved): A company is deciding whether to sign a maintenance contract for its new tire balancing and alignmen ...
A company is deciding whether to sign a maintenance contract for its new tire balancing and alignment machine. Managers think that annual maintenance expenses are related to weekly usage (in hours). To make a decision taking into account these variables, they collect the following data
TAKING INTO ACCOUNT THE DATA COLLECTED. ANSWER THE FOLLOWING QUESTIONS:
• Construct a scatterplot of annual maintenance costs as a function of weekly usage. Is there evidence of a possible linear relationship? Justify.
• Determine the Pear son linear correlation coefficient and the coefficient of determination. Interpret.
• Determine the regression model from the formulas of the estimators.
• Calculate the variation explained by the model (regression sum of squares) and the unexplained variation (error sum of squares). Present the procedure in detail.
• Use Excel to do a regression analysis. Compare with the previous results and interpret the output of the software
Expert Answer
Weekly Usage Annual Maintenance Expenses 13 21.6 10 22.3 20 30.1 28 37.4 32 43.8 17 30.5 24 32.5 31 39.2 40 51.5 38 48.8 a). Scatter Plot A linear relationship between two variables are predicted when the points falls on a straight line. An approxima