6. The city of Rockville would like to estimate maintenance costs, and believes

Question

6. The city of Rockville would like to estimate maintenance costs, and believes the number of miles driven by maintenance employees would be an accurate predictor of maintenance costs. They collected annual cost data for maintenance work performed on its fleet of trucks, including the total maintenance cost and the number of miles driven, and performed regression analysis on the data. The output is shown here: y-intercept Number of Miles 441,013 1.53 0.985 Use the regression output to develop the cost equation Y f vX by filling in the dollar amounts for f and v What would the city of Rockville's estimated costs be if its trucks drove 500,000 miles in year 7? How confident are you of your prediction in part (b)? (Hint: use the R-squared from the regression output in your explanation) a. b. c.

Explanation / Answer

a. Y = 441013+1.53*X

b. Annual cost = 441013+1.53*500000 = 1206013

At 7th year it would be 1206013*7 = 8442091

c. As the R-squared value is 0.985, the equation or model is able to capture 98.5 percent of variation in total maintenance cost

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