Question
The facility manager at a sports textile company wants to build a regression model to forecast monthly electricity costs. Two main variables are thought to
The facility manager at a sports textile company wants to build a regression model to forecast monthly electricity costs. Two main variables are thought to determine electricity cost (in $): average outdoor temperature (in F) and tons of product produced. A portion of the past year's monthly data is shown in the following table.
Electricity cost ($) | Average outdoor temperature (F) | Tons of product |
24100 | 26 | 80 |
23700 | 32 | 73 |
26800 | 46 | 90 |
27400 | 61 | 69 |
30200 | 66 | 75 |
31500 | 73 | 80 |
30100 | 81 | 82 |
29500 | 85 | 80 |
26800 | 76 | 78 |
27500 | 61 | 79 |
28900 | 51 | 75 |
26000 | 39 | 69 |
26600 | 72 | 87 |
26600 | 41 | 74 |
24000 | 84 | 83 |
27300 | 56 | 84 |
29300 | 64 | 84 |
28500 | 85 | 69 |
29000 | 66 | 72 |
30200 | 61 | 80 |
30800 | 51 | 88 |
29000 | 57 | 70 |
25100 | 54 | 69 |
30800 | 74 | 86 |
27800 | 68 | 82 |
31800 | 50 | 87 |
28600 | 46 | 75 |
29600 | 29 | 90 |
27600 | 43 | 81 |
27800 | 45 | 69 |
24600 | 37 | 72 |
24200 | 48 | 71 |
27800 | 38 | 78 |
25100 | 26 | 84 |
24400 | 60 | 90 |
29900 | 36 | 74 |
24500 | 69 | 83 |
26900 | 42 | 87 |
27900 | 77 | 74 |
30600 | 71 | 86 |
a. State the simple linear regression model where electricity cost is treated as the dependent variable while: i. the average outdoor temperature (in F) is the sole independent variable. ii. the tons of product produced is the sole independent variable.
b. Based on the ordinary least square estimate, form the simple linear regression equation by calculating the estimated slope (b1) and the intercept (b0) when: i. the average outdoor temperature (in F) is the sole independent variable. ii. the tons of product produced is the sole independent variable.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started