Chapter 14.2, Problem 19PB

Regression for outsourcing Refer to the previous exercise.

1. a. Set up indicator variables to represent the three service centers.
2. b. The prediction equation is $\hat{y}=7.1+0.5x_1+0.7x_2$, where x₁ is an indicator variable for San Jose and x₂ an indicator variable for Toronto. Find the estimate for the difference in population means (i) between San Jose and Bangalore and (ii) between Toronto and Bangalore.

Outsourcing satisfaction Exercise 14.5 showed an ANOVA for comparing mean customer satisfaction scores for three service centers. The sample means on a scale of 0 to 10 were 7.60 in San Jose, 7.80 in Toronto, and 7.10 in Bangalore. Each sample size = 100, MS error = 0.47, and the F test statistic = 27.6 has P-value < 0.001.

1. a. Explain why the margin of error for separate 95% confidence intervals is the same for comparing the population means for each pair of cities. Show that this margin of error is 0.19.
2. b. Find the 95% confidence interval for the difference in population means for each pair of service centers. Interpret.
3. c. The margin of error for Tukey 95% multiple comparison confidence intervals for comparing the service centers is 0.23. Construct the intervals. Interpret.
4. d. Why are the confidence intervals different in part b and in part c? What is an advantage of using the Tukey intervals?