Individual Assignment 5

Due Date: 25 April 2011 4pm (Monday)

Late assignment will not be entertained.

1) The following table gives information on ticket price (in RM) for express bus company and
number of passengers for six destinations for last weekend.
Ticket price 28.5 16.5 24.0 35.5 39.5 26.0
Number of passengers 560 650 710 690 550 420
a) Determine the strength of the relationship between ticket price and number of
passengers. Interpret the value.
b) Conduct a test of the population correlation coefficient to determine whether a negative
linear relationship between ticket price and number of passengers is exists at 2.5%
significance level.
c) Find the least squares regression line.
d) Interpret the coefficient obtained in (iii).
e) Predict the number of passengers when the ticket price is RM70.

Solution:
a)
There is weak negative relationship between ticket price and number of passengers.

b)

Failed to reject
There is no negative linear relationship between ticket price and number of passengers
at 2.5% significance level.

c)

d) When the ticket price is free, the number of passengers is 644.

For every RM 1 increment in ticket price, the number of passengers will decrease
1.6699.

e)

lyf & hpy – April’11 1

2) A study investigates if temperature (x) has any influence on turbidity (y), a measure of
water cloudiness indicating water quality levels. The following data are collected:

x 23.8 24.5 22.8 20.4 26.2 26.1 22.7 28.6 29 25.8 26.4 22.5
y 126 117 105 25 180 98 57 198 238 101 155 70

a) Can we conclude that there is a relationship between the temperature and turbidity at
5% significance level?
b) Find the equation of the regression line.
c) Is there enough evidence to conclude that the temperature has significant influence on
turbidity at 1% significance level? Will you change your conclusion if the level of
significance increases to 5%?
d) Estimate the value when x = 30.7oC.
e) How well the model fit the data?

Solution:
a)

Reject
There is a relationship between the temperature and turbidity at 5% significance level.

b)

c)

Reject
The temperature has significant influence on turbidity at 1% significance level.

Reject
The conclusion doesn’t change if the level of significance increases to 5% because we
still reject at 5% significance level.

lyf & hpy – April’11 2

 d)

e)
81.43% of the variation in turbidity can be explained by the variation in temperature.
Only 18.57% is unexplained, due to error.

3) Suppose that the sales manager of a large automotive parts distributor wants to estimate the
total annual sales of a region. Several factors appear to be related to sales, including the
number of retail outlets (X1), number of automobiles registered (X2), personal incomes
(X3), average age of automobiles (X4) and number of supervisors (X4). The following
output is the results of the analysis obtained by the sales manager. Based on the output,
answer the following questions.
ANOVA(b)
Sum of
Model Squares df Mean Square F Sig.
1 Regression 1594.237 5 318.847 148.003 .000(a)
Residual 8.617 4 2.154
Total 1602.855 9
a Predictors: (Constant), x5, x3, x2, x4, x1
b Dependent Variable: sales

Coefficients(a)

Unstandardized Standardized
Model Coefficients Coefficients t Sig.

B Std. Error Beta

1 (Constant) -20.157 5.041 -3.998 .016
x1 .000 .003 -.020 -.148 .889
x2 1.696 .514 .311 3.299 .030
x3 .425 .043 .922 9.775 .001
x4 2.316 .932 .144 2.483 .068
x5 -.145 .203 -.042 -.714 .515
a Dependent Variable: sales

Correlations

sales x1 x2 x3 x4 x5
sales Pearson Correlation 1 .899(**) .604 .962(**) -.369 .243
Sig. (2-tailed) .000 .064 .000 .294 .500
x1 Pearson Correlation .899(**) 1 .775(**) .820(**) -.504 .144
Sig. (2-tailed) .000 .008 .004 .137 .691
x2 Pearson Correlation .604 .775(**) 1 .400 -.314 .364
Sig. (2-tailed) .064 .008 .252 .377 .301
x3 Pearson Correlation .962(**) .820(**) .400 1 -.439 .115
Sig. (2-tailed) .000 .004 .252 .204 .751
x4 Pearson Correlation -.369 -.504 -.314 -.439 1 .471
Sig. (2-tailed) .294 .137 .377 .204 .169
x5 Pearson Correlation .243 .144 .364 .115 .471 1
Sig. (2-tailed) .500 .691 .301 .751 .169
** Correlation is significant at the 0.01 level (2-tailed).

lyf & hpy – April’11 3

 a) Write down the estimated equation of the regression line.
b) Is there sufficient evidence to indicate that there is a positive relationship between
sales and X2 at 2.5% level of significance?
c) Which explanatory variable has no significant effect on Y at 5% significance level?
d) Which variable(s) has negative relationship with X1?
e) Which two variables have the strongest relationship?
f) Describe the strength and direction between X5 and the dependent variable.
g) State the value for determination coefficient and interpret it.

Solution:
a)

b)

Failed to reject
The relationship is not significant at 5% significance level.

c) X1, X4 and X5

d) X4

e) X3 and sales

f) There is a weak positive relationship between X5 and the dependent variable.

g)
99.46% of the variation in total annual sales can be explained by the variation in
number of retail outlets (X1), number of automobiles registered (X2), personal incomes
(X3), average age of automobiles (X4) and number of supervisors (X4).
Only 0.54% is unexplained, due to error.

lyf & hpy – April’11 4

4) The electric power consumed (y) each month by a chemical plant is thought to related to
the average ambient temperature ( ), the number of days in the month ( ), the average
product purity ( ) and the tons of product produced ( ). The past year’s historical data
are available and are recorded. The output displayed the result of analysis.

Correlations
y x1 x2 x3 x4
y Pearson
1 .744(**) .802(**) .890(**) .823(**)
Correlation
Sig. (2-tailed) . .001 .000 .000 .000
N 15 15 15 15 15
x1 Pearson
.744(**) 1 .849(**) .914(**) .934(**)
Correlation
Sig. (2-tailed) .001 . .000 .000 .000
N 15 15 15 15 15
x2 Pearson
.802(**) .849(**) 1 .769(**) .976(**)
Correlation
Sig. (2-tailed) .000 .000 . .001 .000
N 15 15 15 15 15
x3 Pearson
.890(**) .914(**) .769(**) 1 .868(**)
Correlation
Sig. (2-tailed) .000 .000 .001 . .000
N 15 15 15 15 15
x4 Pearson
.823(**) .934(**) .976(**) .868(**) 1
Correlation
Sig. (2-tailed) .000 .000 .000 .000 .
N 15 15 15 15 15
** Correlation is significant at the 0.01 level (2-tailed).

Model Summary
Adjusted R Std. Error of
Model R R Square Square the Estimate
1 .973(a) .946 .925 3.23125
a Predictors: (Constant), x4, x3, x1, x2

ANOVA(b)
Sum of
Model Squares df Mean Square F Sig.
1 Regression 1838.698 4 459.675 44.026 .000(a)
Residual 104.410 10 10.441
Total 1943.108 14
a Predictors: (Constant), x4, x3, x1, x2
b Dependent Variable: y

Coefficients(a)
Unstandardized Standardized
Coefficients Coefficients

Model B Std. Error Beta t Sig.

1 (Constant
3.716 2.274 1.634 .133
)
x1 -1.400 .727 -.643 -1.924 .083
x2 1.335 .564 1.497 2.367 .040
x3 5.896 .856 1.453 6.891 .000
x4 -.755 .545 -1.299 -1.385 .196
a Dependent Variable: y

lyf & hpy – April’11 5

 a) Which variables are the explanatory variables?
b) Which variable is the dependent variable?
c) Which independent variable has the strongest relationship with the power
consumption? State the value.
d) Interpret the relationship between the average ambient temperature and power
consumption. State whether the relationship is significant at α = 0.05.
e) Write down the regression model obtained.
f) List the variables of X that is able to make the variable of Y to decrease when it
increases.
g) List the explanatory variables that have significant effect on power consumption at α =
0.05.
h) Based on output, test at 2% level of significance. Is variable tons of product
produced should be included in the model?
i) Predict power consumption for a month in which = 25oF, = 24 days, = 15 and
= 98 tons.
j) Interpret the coefficient of determination.

Solution:
a) The average ambient temperature ( )
The number of days in the month ( )
The average product purity ( )
The tons of product produced ( ).

b) The electric power consumed (y)

c) The average product purity ( ), = 0.890

d) = 0.744, there is a strong positive relationship between the average temperature

and power consumption.

Reject

The relationship is significant at 5% significance level.

e)

f) and

g) and

h)

Failed to reject
The tons of product produced has no significant at 2% level of significance.

So that, tons of product produced shouldn’t be include in the model.

lyf & hpy – April’11 6

 i)

j)
94.6% of the variation in electric power consumed can be explained by the variation in
average ambient temperature, number of days in the month, average product purity
and tons of products produced.
Only 5.4% is unexplained, due to error.

lyf & hpy – April’11 7