The manager of a furniture company has collected data on the amount of money spe
ID: 3437726 • Letter: T
Question
The manager of a furniture company has collected data on the amount of money spent on advertising and sales revenue for the last ten months. The data is as follows:
Advertising
Sales Revenue
Month
Expense
($Millions)
($ Billions)
1
14
24
2
12
14
3
20
28
4
16
30
5
46
80
6
23
30
7
48
90
8
50
85
9
55
120
10
50
110
Determine the regression equation.(use the formulas in the text).
b) In the context of this problem, interpret the values of b0 and b1.
Compute SST,SSR and SSE.
Compute the coefficient of determination and interpret its meaning.
Compute the correlation coefficient and interpret its meaning.
Advertising
Sales Revenue
Month
Expense
($Millions)
($ Billions)
1
14
24
2
12
14
3
20
28
4
16
30
5
46
80
6
23
30
7
48
90
8
50
85
9
55
120
10
50
110
Explanation / Answer
The scatter plot is as this
For coefficient of determination first find correlation coefficient r.
X=334 , Y=611 , XY=26584 , X2=13970 , Y2=51581
r=0.9754
r = 0.9754 is near 1 and positive.
This implies there is strong positive correlation between x and y
r^2 = 0.9514
Coefficient of determination explains the variation of dependent variable for indepependent variable.
Month Expense ($ Billions) ($Millions) 14 24 336 196 12 14 168 144 20 28 560 400 16 30 480 256 46 80 3680 2116 23 30 690 529 48 90 4320 2304 50 85 4250 2500 55 120 6600 3025 50 110 5500 2500 334 611 26584 13970 a -12.201 b 2.195Related Questions
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