Math533 Applied Managerial Statistics (Part C)

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Name: Course: MATH533 Applied Managerial Statistics Date: February 20, 2013 Instructor: Project: Project Part C: Regression and Correlation Analysis AJ Davis Department Store wants a random sample performed on 50 customers based on location, income, family size, and credit. This information is needed so that the store may have an understanding of their customers spending habits based on the above mentioned variables. The study has established that credit balance varies directly with size. As size increases, credit balance increases. As the size of the household increases so does the credit balance. The correlation coefficients between the variables show a direct relationship. This means there is an extremely low chance that credit balances are due to chance. The independent variables of income and size have a significant contribution. Years should be discarded because it does have a significant contribution. To conclude and based on the analysis, income and size is good predictor that credit balances will increase. These relationships are important to AJ Davis Department Store. As shown in the following statistics the company will be able to survive. Using MINITAB perform the regression and correlation analysis for the data on CREDIT BALANCE (Y) and SIZE (X) by answering the following. 1. Generate a scatterplot for CREDIT BALANCE vs. SIZE, including the graph of the ‘best fit’ line. Interpret. From the scatter plot it is evident that the slope of the ‘best fit’ line is positive, which indicates that Credit Balance varies directly with Size. As Size increases, Credit Balance increases and vice versa. MINITAB OUTPUT: Regression Analysis: Credit Balance ($) versus Size The regression equation is Credit Balance ($) = 2591 + 403 Size Predictor Coef SE Coef T P Constant

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