The regional transit authority for a major metropolitan area wants to determine

Question

The regional transit authority for a major metropolitan area wants to determine whether there is a relationship between the age of a bus and the annual maintenance cost. A sample of ten buses resulted in the following data. Click on the datafile logo to reference the data. Age of Bus Annual Maintenance (y Cost 480 950 (a) Choose a scatter chart below with age of bus as the independent variable. (iii) Select yo What does the scatter chart indicate about the relationship between age of a bus and the annual maintenance cost? The scatter chart indicates there may be a Select your answer linear relationship between age of bus and annual maintenance cost, Older buses generally cost more to maintain, and this scatter chart is consistent with what is expected

Explanation / Answer

a) Scatter plot scales are not visible properly but as per i can see, Option (ii) is correct.

The scatter plot indicate that there may be a positive linear relationship between age of bus and annual maintenance cost.

b) The statistical software output for this problem is:

Simple linear regression results:
Dependent Variable: Annual maintanance ($)
Independent Variable: Age of Bus (Years)
Annual maintanance ($) = 220 + 131.66667 Age of Bus (Years)
Sample size: 10
R (correlation coefficient) = 0.93407765
R-sq = 0.87250105
Estimate of error standard deviation: 75.498344

Parameter estimates:

Analysis of variance table for regression model:

Hence,

Regression equation will be:

y = 220 + 131.67 x

c) Both bo and b1 are significant and therefore, they both are not equal to 0.

Parameter Estimate Std. Err. Alternative DF T-Stat P-value Intercept 220 58.480766 0 8 3.7619206 0.0055 Slope 131.66667 17.79513 0 8 7.3990279 <0.0001

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