QUESTION 5 Alia Al Ketbi, one of the employees that got terminated, was awarded

Question

QUESTION 5

Alia Al Ketbi, one of the employees that got terminated, was awarded a severance of AED 60,000. She has been working with the company for 9 years, received a monthly salary of AED 12,000, and had a total of 3 absences in her record.

Q5. Use the regression model to determine if her severance package was fair.

Table 2: Multiple Linear Regression: Summary Output

Coefficients

Intercept

-0.43

Employee Absences

-3.23

Length of Service

0.25

Monthly Salary

7.45

Table 2: Multiple Linear Regression: Summary Output

Coefficients

Intercept

-0.43

Employee Absences

-3.23

Length of Service

0.25

Monthly Salary

7.45

Explanation / Answer

Using regression equation, estimated severage package = -0.43 - 3.23*3 + 0.25*9 + 7.45*12000

= 89,392

She should have received a severance package of 89392,

but she received only 60000, which is less than what she should have received.

Therefore, here severage package was not fair.

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