Chapter 7.4, Problem 5E

Good forecasting and control of preconstruction activities leads to more efficient use of time and resources in highway construction projects. Data on construction costs (in $1000s) and person-hours of labor required on several projects are presented in the following table and are taken from the article “Forecasting Engineering Manpower Requirements for Highway Preconstruction Activities” (K. Persad, J. O’Connor, and K. Varghese, Journal of Management Engineering, 1995:41–47). Each value represents an average of several projects, and two outliers have been deleted.

1. a. Compute the least-squares line for predicting y from x.
2. b. Plot the residuals versus the fitted values. Does the model seem appropriate?
3. c. Compute the least-squares line for predicting ln y from ln x.
4. d. Plot the residuals versus the fitted values. Does the model seem appropriate?
5. e. Using the more appropriate model, construct a 95% prediction interval for the cost of a project that requires 1000 person-hours of labor.