Question: A department store gives in-service training to its salesmen which are followed by a test. It is considering whether it should terminate the services of any salesman who does not do well in the test. The following data gives the test scores and sales made by the salesmen during a certain period. Test Scores 15 20 25 22 27 23 16 21 20 Sales (Thousand Tk): 43 17 49 38 51 46 33 41 39
Correlation
Correlation defines a relationship between two independent variables. It tells the degree to which variables move in relation to each other. When two sets of data are related to each other, there is a correlation between them.
Linear Correlation
A correlation is used to determine the relationships between numerical and categorical variables. In other words, it is an indicator of how things are connected to one another. The correlation analysis is the study of how variables are related.
Regression Analysis
Regression analysis is a statistical method in which it estimates the relationship between a dependent variable and one or more independent variable. In simple terms dependent variable is called as outcome variable and independent variable is called as predictors. Regression analysis is one of the methods to find the trends in data. The independent variable used in Regression analysis is named Predictor variable. It offers data of an associated dependent variable regarding a particular outcome.
Interpret the regression coefficient and Intercept. Does it surprise you that the relationship is not inverse? Why?
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