An operations manager is interested in modeling E(y), the expected length of time per month (in hours)
Question:
E(y) = β0 + β1x1 + β2x21 +β3x2
where
x1 = Age of machine
x2 = 1 if machine type 001,0 if machine type 002
The following data were obtained for n = 20 machine breakdowns.
a. Use the data (saved in the file) to estimate the parameters of this model.
b. Do these data provide sufficient evidence to conclude that the second-order term (x21) in the model proposed by the operations manager is necessary? Test using a = .05.
c. Test the null hypothesis that β1 = β2 = 0 using a = .10. Interpret the results of the test in the context of the problem.
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Related Book For
Statistics For Business And Economics
ISBN: 9780321826237
12th Edition
Authors: James T. McClave, P. George Benson, Terry T Sincich
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