Mgmt 533

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MATH 533(Applied Managerial Statistics) Project AJ Davis Department Stores; Part C: Regression and Correlation Analysis Using MINITAB perform the regression and correlation analysis for the data on CREDIT BALANCE (Y) and SIZE (X) by answering the following. 1. Generate a scatterplot for CREDIT BALANCE vs. SIZE, including the graph of the "best fit" line. Interpret. Scatterplot of Credit Balance($) vs Size 6000 5000 Credit Balance($) 4000 3000 2000 1 2 3 4 Size 5 6 7 The scatter plot of Credit balance ($) versus Size show that the slope of the „best fit‟ line is upward (positive);this indicates that Credit balance varies directly with Size. As Size increases, Credit Balance also increases vice versa. Correct…show more content…
Correct MINITAB OUTPUT: Predicted Values for New Observations New ObsFit 1 4607.5 SE Fit 95% CI 119.0 (4368.2, 4846.9) 95% PI (3337.9, 5877.2) Values of Predictors for New Observations New Obs 1 Size 5.00 9. Using an interval, predict the credit balance for a customer that has a household size of 5. Interpret this interval. The credit balance for a customer that has household size of 5 is expected to lie within the interval of (3337.9, 5877.2). This is the 95% prediction interval estimate for the credit balance for a customer that has household size of 5. Correct MINITAB OUTPUT: Predicted Values for New Observations New ObsFit 1 4607.5 SE Fit 95% CI 119.0 (4368.2, 4846.9) 95% PI (3337.9, 5877.2) Values of Predictors for New Observations New Obs 1 Size 5.00 10. What can we say about the credit balance for a customer that has a household size of 10? Explain your answer. We cannot say anything about the credit balance for a customer that has a household size of 10 because since the maximum value of the predictor variable (size) used to formulate the given regression model is only 7, which is much less than 10; therefore, we cannot use the given regression model to accurately estimate the credit balance for a customer that has a household size of 10. Correct In an attempt to improve the model, we attempt to do a multiple regression model predicting CREDIT BALANCE based on INCOME, SIZE and YEARS. 11. Using MINITAB run the

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