In the file Jensenxlsx Jensen auto is deciding whether to pu

In the file Jensen.xlsx, Jensen auto is deciding whether to purchase a new maintenance contract for its new computer wheel alignment and balancing machine. The data in the file shows the relationship between usage and annual expense.

a. Develop a scatter chart with usage as the independent variable.

b. Use the data to develop a regression equation that could be used to predict the annual maintenance expense for a given numbers of hours of weekly usage. What is the model?

c. How much of the variation in the sample values of annual maintenance does the model you estimate in part b explain (Hint: Use r squared to explain).

Weekly Usage (hours)	Annual Maintenance Expense
13	17.0
10	22.0
20	30.0
28	37.0
32	47.0
17	30.5
24	32.5
31	39.0
40	51.5
38	40.0

Let us assume y = maintenance expense and x = weekly usage

a) Scatter chart for the given data set:

b) Excel output ANOVA

Regression equation: y = 0.95645x + 10.5017

c) r² = 0.8399

This is the value of explained variation.

SUMMARY OUTPUT

Regression Statistics
Multiple R	0.926115097
R Square	0.857689173
Adjusted R Square	0.83990032
Standard Error	4.236830413
Observations	10

ANOVA
	df	SS	MS	F	Significance F
Regression	1	865.4941444	865.4941444	48.2149779	0.00011917
Residual	8	143.6058556	17.95073195
Total	9	1009.1

	Coefficients	Standard Error	t Stat	P-value	Lower 95%	Upper 95%	Lower 95.0%	Upper 95.0%
Intercept	10.501744	3.73359821	2.81276758	0.022745866	1.892051098	19.11143691	1.892051098	19.11143691
X Variable 1	0.956452806	0.137743959	6.943700591	0.00011917	0.638814669	1.274090944	0.638814669	1.274090944

In the file Jensen.xlsx, Jensen auto is deciding whether to purchase a new maintenance contract for its new computer wheel alignment and balancing machine. The

In the file Jensenxlsx Jensen auto is deciding whether to pu

Solution

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