Regression Homework

Regression Homework #1 Patrick Ulrich y = 0.4567x + 1430.8 R2 = 0.4188

y = 0.4419x + 714.83 R2 = 0.8739

Utility Cost vs. Machine Hours

$2,750 $2,650

Utility Costs

Utility Costs

$2,700 $2,600 $2,550 $2,500 $2,450 $2,400 2,300

2,400

2,500

2,600

2,700

2,800

Machine Hours

3.) Based on the plot above I would assume that a linear relationship would not exist. My assumption is made due to the many markings that fall so far from the trend-line. 4.) From the plot I would assume that the cost driver does not make a good fit for explaining the costs. Since so many lines fall so far from the trend-line it makes me believe that it would be too far random.

$2,800 $2,750 $2,700 $2,650 $2,600 $2,550 $2,500 $2,450 $2,400 3,900

Utility Cost vs. Labor Hours

4,000

4,100

4,200

4,300

4,400

4,500

4,600

4,700

Labor Hours

3.) From the plot above I would assume that there is a linear relationship with the data. I find this to be true from how most of the markings fall relatively close to the trend-line, unlike the machine hours which fall far from the line at times. 4.) This does make a good fit I would assume to explain that labor hours are indeed the best view of what’s driving costs. Most of the plots fall on or near the line leading me to believe that it is a very good fit to explain the costs.