1.Repair costs of machines on a production line has become a matter of concern for

JF Corp. A model to predict repair-time needed to fix broken machines was developed based on two independent variables:

(i) TIME-the time since the last service (in months), (ii) TYPE-the type of repair needed (electrical or mechanical). The input data and the Regression output are provided in the file Exam 1-Data/ sheet Repair. Use them to answer the following questions.

2.1This model is useful because the significance F is less than 5%. Thus, we can conclude that....

a.Beta0 (Intercept), Beta1 (for TIME), and Beta 2 (for TYPE) are all 'not zero'.

b.TIME and TYPE are both significant variables

c.Beta 1 and Beta 2 are both not zero.

d.None of the above

2.2You want to verify whether or not there is a significant difference between the repair time of a mechanical and an electrical repair? Which test you should formulate?

a.No need to formulate any additional test, because we know the model is useful

b.H0: Beta 1(TIME) = 0. If we do not reject H0, then Beta2 must be "not zero" which means there is a difference between the two repair times.

c.H0: Beta 2 (Type) = 0. If we reject H0, then there is a difference between the two repair times.

2.3On the average, which repair takes longer time, electrical or mechanical. How much longer? Use the regression output to answer.

a.Electrical, but it is impossible to calculate the difference because the TIME value is unknown.

b.From the data the average repair time of a mechanical problem is 6.3 hours. The average repair time for electrical problem is 3.3 hours. Mechanical repair takes 3 hours longer on the average.

c.Mechanical. It takes 2.088 hours longer provided you compare two machines that received their last repair service at the same.

d.Electrical. It takes 2.088 hours longer provided you compare two machines that received their last repair service at the same.

2.4 Interpret the intercept in the Answers sheet.

3Calculate the predicted repair time for two machines:

3.1Machine 1 - an electrical type repair if the last service took place 9 months ago.

3.2Machine 2 - a mechanical type repair if the last service took place 2 months ago

For the two machine of question 3, can you argue with 90% confidence that machine 2 will be down longer than machine 1? Use prediction intervals to answer. See the Answers sheet for the required answers.