he following data were collected during a study of consumer buying patterns: Observation x y Observation x y 1 19 72 8 20 77 2 21 81 9 17 73 3 43 79 10 13 77 4 28 81 11 20 85 5 56 98 12 28 93 6 49 96 13 34 94 7 32 82 14

he following data were collected during a study of consumer buying patterns: Observation x y Observation x y 1 19 72 8 20 77 2 21 81 9 17 73 3 43 79 10 13 77 4 28 81 11 20 85 5 56 98 12 28 93 6 49 96 13 34 94 7 32 82 14

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter13: Regression And Forecasting Models

Section: Chapter Questions

Problem 34P: A small computer chip manufacturer wants to forecast monthly ozperating costs as a function of the...

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Concept explainers

Forecasting

Forecasting is a methodology that uses historical data as inputs to make well-informed predictions about the course of future trends. Forecasting is the method of making forecasts based on historical and current data, most commonly by trend analysis. In the business world, forecasting is a basic statistical task. Forecasting is used by businesses to decide how to allocate their budgets or prepare for expected expenditures in the future. Forecasts help managers formulate and execute production plans by providing forecasts. The primary goal of forecasting is to make accurate predictions.

Question

The following data were collected during a study of consumer buying patterns:
Observation x y Observation x y
1 19 72 8 20 77
2 21 81 9 17 73
3 43 79 10 13 77
4 28 81 11 20 85
5 56 98 12 28 93
6 49 96 13 34 94
7 32 82 14
a. Obtain a linear regression line for the data.
b. What percentage of the variation is explained by the regression line?
c. Use the equation determined in part b to predict the expected value of y for x = 49.

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