Flyer Computer, Inc., wishes to know the effect of various variables on labor efficiency. Based on a sample of 64 observations, the following model was estimated by least squares:

where
y` = index of direct labor efficiency in production plant
x1 = ratio of overtime hours to straight-time hours worked by all production workers
x2 = average number of hourly workers in the plant
x3 = percentage of employees involved in some quality-of-work-life program
x4 = number of grievances filed per 100 workers
x5 = disciplinary action rate
x6 = absenteeism rate for hourly workers
x7 = salaried workers€™ attitudes, from low (dissatisfied) to high, as measured by questionnaire
x8 = percentage of hourly employees submitting at least one suggestion in a year to the plant€™s suggestion program
Also obtained by least squares from these data was the fitted model:
y` = 9.062 - 10944x1 + 0.320x2 + 0.019x3 R2 = 0.242
The variables x4, x5, x6, x7, and x8 are measures of the performance of a plant€™s industrial relations system.
Test, at the 1% level, the null hypothesis that they do not contribute to explaining direct labor efficiency, given that x1, x2, and x3 are also to be used.

Transcribed Image Text:

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