There is a perception that the wastage is depends upon the level of production. You are required to verify this perception, by performing the regression analysis in the last 12-month data given below. After analysis, answers the given question: Write down the value of coefficient of correlation and interpret it. Write down the value of coefficient of determination and interpret it. Write down the regression equation for estimating the wastage in the next month
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.
There is a perception that the wastage is depends upon the level of production. You are required to verify this perception, by performing the
After analysis, answers the given question:
- Write down the value of coefficient of
correlation and interpret it. - Write down the value of coefficient of determination and interpret it.
- Write down the regression equation for estimating the wastage in the next month
- Comments about the validity of regression model (equation)
- How much will be the estimated wastage if the production level is 5,000,000.
|
Production |
Wastage |
|
4,341,970 |
39,048 |
|
3,911,307 |
36,076 |
|
4,092,487 |
36,557 |
|
3,983,795 |
40,748 |
|
3,719,102 |
41,419 |
|
4,174,050 |
38,873 |
|
3,904,921 |
40,764 |
|
3,819,264 |
43,368 |
|
3,602,300 |
40,153 |
|
4,152,615 |
41,479 |
|
3,917,154 |
37,333 |
|
3,833,967 |
37,927 |
Step by step
Solved in 4 steps
