Student Solutions Manual for Basic Business Statistics

13th Edition

ISBN: 9780321926708

Author: David M. Levine; Mark L. Berenson; Timothy C. Krehbiel; Kathryn A. Szabat; David F. Stephan

Publisher: Pearson Education

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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 p…

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Textbook Question

Chapter 13, Problem 79PS

An accountant for a large department store has the business objective of developing a model to predict the amount of time it takes to process invoices. Data are collected from the past 32 working days, and the number of invoices processed and completion time (in hours) are stored in invoice. (Hint: First determine which are the independent and department variables.)

a. Assuming a linear relationship, use the least-square method to compute the regression coefficients b 0 and b 1 .

b. interpret the meaning of the Y intercept, b 0 , and the slope, b 1 , in this problem.

c. Use the prediction line developed in (a) to predict the mean amount of time it would take to process 150 invoices.

d. Determine the coefficient of determination r 2 , and interpret its meaning.

e. plot the residuals against the number of invoices processed and also against time.

f. Based on the plots in (e), does the model seem appropriate?

g. Based on the results in (e), and (f), what conclusions can you reach about the validity of the prediction made in (c)?

h. What conclusions can you reach about the relationship between the number of invoices and the completion time?

Definition Definition Measure of central tendency that is the average of a given data set. The mean value is evaluated as the quotient of the sum of all observations by the sample size. The mean, in contrast to a median, is affected by extreme values. Very large or very small values can distract the mean from the center of the data. Arithmetic mean: The most common type of mean is the arithmetic mean. It is evaluated using the formula: μ = 1 N ∑ i = 1 N x i Other types of means are the geometric mean, logarithmic mean, and harmonic mean. Geometric mean: The nth root of the product of n observations from a data set is defined as the geometric mean of the set: G = x 1 x 2 ... x n n Logarithmic mean: The difference of the natural logarithms of the two numbers, divided by the difference between the numbers is the logarithmic mean of the two numbers. The logarithmic mean is used particularly in heat transfer and mass transfer. ln x 2 − ln x 1 x 2 − x 1 Harmonic mean: The inverse of the arithmetic mean of the inverses of all the numbers in a data set is the harmonic mean of the data. 1 1 x 1 + 1 x 2 + ...

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Chapter 13, Problem 78PS

Chapter 13, Problem 80PS

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Chapter 13 Solutions

Student Solutions Manual for Basic Business Statistics

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Solution Summary: The author explains how to determine the regression coefficients using least-squares method. The data of the number of invoices processed and the completion time (in hours) is given.

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Chapter 13 Solutions