Consider the data set in Table 11.3.1, representing the ages (in years) and maintenance costs (in thousands of dollars per year) for five similar printing presses.
a. Draw a scatterplot of this data set. What kind of relationship do you see?
b. Find the correlation between age and maintenance cost. What do you learn from it?
c. Find the least-squares regression equation that predicts maintenance cost from the age of the machine. Draw this line on a scatterplot of the data.
d. What would you expect the annual maintenance to be for a press that is seven years old?
e. What is a typical size for the prediction errors?
f. How much of the variation in maintenance cost can be attributed to the fact that some presses are older than others?
g. Does age explain a significant amount of the variation in maintenance cost? How do you know?
h. Your conservative associate has suggested that you use $20,000 for planning purposes as the extra annual maintenance cost per additional year of life for each machine. Perform a hypothesis test at the 5% level to see if the extra annual cost is significantly different from your associate’s suggestion.

  • CreatedNovember 11, 2015
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