Sample Correlation

Question

A small Internet company wants to determine how the   money they spend on Google Adwords impacts their monthly revenue. Over 6   consecutive months, they vary the amount they spend on their Adwords campaign   (in \$) and record the associated revenue (in \$) for each month. The data is   shown below.        Adwords Revenue    50 439    75 501    100 514    125 585    150 440    175 589

1)Develop   a regression equation for predicting monthly revenue based on the amount   spent with Adwords. What is the y-intercept? Give your answer to two decimal   places.

2)What   is the sample correlation between these two variables? Give your answer to   two decimal places.

Question

Use the following   data to answer questions. Show all work.       x 0, – 2, 1, 1, 2   y 2, – 2, 5, 4, 8      Find an equation of the least squares   regression line. Find the predicted value when   x = 1. Is there a correlation between x   and y at the 0.01 significance level? Justify your answer

Question

The production manager has asked you to purchase a replacement numerically controlled (NC) plasma-cutting machine for the metal fabrication shop. She has provided you with the manufacturer’s number and model number for two models and indicates that the performance of either machine is perfectly acceptable. The existing tooling and fixtures will also work with either machine. Footprint and utility requirements are nearly the same as the old machine and will not require changes to the facility.

The equipment will be depreciated over a ten-year period, which is also the expected service life. An annual service contract is required after the expiration of the warranty and throughout the remaining service life. You will take advantage of a 2% discount offered by each supplier for paying cash. You decide to complete a total cost of ownership (TCO) analysis to help make the purchasing decision.

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