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1. Martha K. Smith, school bus supervisor for the Paradise School District, would like to deter- mine whether there is a positive or negative relationship
1. Martha K. Smith, school bus supervisor for the Paradise School District, would like to deter- mine whether there is a positive or negative relationship between the annual maintenance expense of a school bus and the bus age. If a relationship exists, Martha feels that she can do a better job on forecasting the annual bus maintenance budget. She collects the data shown in Figure 6.10. Using Excel or other statistical software obtain the appropriate graphs and statis- tics and answer the following questions: a. Plot a scatter diagram and predicted regression line. b. Using these plots, what kind of relationship exists between these two variables? c. Obtain and interpret the correlation coefficient. d. Obtain and interpret the coefficient of determination. e. Obtain and interpret the standard error. f. Determine the least squares line or predicted regression. g. Test for the significance of the slope coefficient at the 0.05 significance level. Is the correla- tion significant? Explain. h. Forecast the annual maintenance cost for a five-year-old bus. Figure 6.10 Annual Bus Maintenance budget Maintenance Expenditure for the School District per School Bus Y Bus Age (Years) year ($) 1 $849 7 2 $782 6 3 $397 3 4 $758 9 5 11 $2,534 $224 6 2 7 $320 1 8 $1,435 12
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