A manager of a trucking company is interested in determining how the maintenance

Question

A manager of a trucking company is interested in determining how the maintenance cost of the company's trucks is related to the age of the truck.

a) calculate the correlation coefficient and explain what it means about the relationship between maintenance cost and age.

b) now calculate the estimated sample regression function, assuming that maintenance cost is the dependent variable. what do the slope and intercept mean?

c) if a truck is 7 years old, what are the estimated maintenance costs?

Cost (dollars) Age (Years) 593.0955391 1 1471.442321 4 1484.858277 4 1344.360104 3 1581.986855 5 1346.116566 3 1462.899437 4 1846.526349 8 1386.121259 3 1396.024974 3 1553.817303 4 1209.254098 2 789.2189766 1 2182.279278 9 1933.386958 9 1735.035031 6 1283.576641 3 1146.125161 2 1581.581675 5 1384.639692 3 1510.179974 4 1459.03454 3 1577.374693 5 1877.663127 9 1100.350748 2 1257.658088 3 1699.153078 6 1514.957891 4 1827.13092 8 720.1774148 1 1523.835355 4 1025.962721 2 1529.641569 4 1548.019615 4 1626.236728 5 1564.417463 5 1240.264684 3 1761.979494 7 1208.850282 2 1666.455266 6 1680.837105 6 848.8527252 1 1185.59132 2 1218.583467 2 2011.492544 9 1755.289933 7 1179.038183 2 1822.675305 8 1777.872914 7 1406.684138 3

Explanation / Answer

a) r = 35175.044 / ((5298778.807)(268.88)) = 0.9319

b) Mean x (x): 1456.772155594
Mean y (y): 4.32
Intercept (a): -5.3505347997432
Slope (b): 0.0066383303405467

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