Question: Lori Franz, maintenance supervisor for the Baltimore Transit Authority, would like to determine whether there is a positive relationship between the annual maintenance cost of

Lori Franz, maintenance supervisor for the Baltimore Transit Authority, would like to determine whether there is a positive relationship between the annual maintenance cost of a bus and its age. If a relationship exists, Lori feels that she can do a better job of forecasting the annual bus maintenance budget. She collects the data shown in Table P-5.

a. Plot a scatter diagram.
b. What kind of relationship exists between these two variables?
c. Compute the correlation coefficient.
d. Determine the least squares line.
e. Test for the significance of the slope coefficient at the .05 significance level. Is the correlation significant? Explain.
f. Forecast the annual maintenance cost for a five-year-old bus.

TABLE P-S Maintenance Cost (5) Age (years) Bus 859 682 471 708 1,094 224 320 651 1,049 12

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