Bicycling world, a magazine devoted to cycling, reviews hundreds of bicycles throughout the year.

Its Road-Race cat

contains reviews of bicycles used by riders primarily interested in racing. One of the most important factors in selec
bicycle for racing is its weight. The following data show the weight (pounds) and price ($) for ten racing bicycles rev
by the magazine:

Model Weight (lbs) Price ($)

Fierro 7B 17.9 2200
HX 5000 16.2 6350
Durbin Ultralight 15 8470
Schmidt 16 6300
Wsilton Advanced 17.3 4100
Bicycle Velo 13.2 8700
Supremo Team 16.3 6100
XTC Racer 17.2 2680
D'Onoforio Pro 17.7 3500
Americana #6 14.2 8100

1. Develop a scatter chart with weight as the independent variable. What does the scatter chart indicate about the r
2. Use the data to develop an estimated regression equation that could be used to estimate the price for a bicycle, g
3. Test whether each of the regression parameters is equal to zero at 0.005 level of significance. What are the corre
4. How much of the variation in the prices of the bicycles in the sample does the regression model you estimated in
5. The manufacturers of the D'Onoforio Pro plan to introduce the 15-pound D'Onoforio Elite bicycle later this year. U
ughout the year. Its Road-Race category
he most important factors in selecting a
rice ($) for ten racing bicycles reviewed

scatter chart indicate about the relationship between the weight and price of these bicycles?
estimate the price for a bicycle, given its weight. What is the estimated regression model?
significance. What are the correct interpretations of the estimated regression paramters? Are these interpretations reasonable
egression model you estimated in question #2? Explain
forio Elite bicycle later this year. Use the regression model you estimated in question #1 to predict the price of the D'Ontorio Eli
e interpretations reasonable?

he price of the D'Ontorio Elite.

 In a manufacturing process the assembly line speed (feet per minute) was thought to affect the
number of defective parts found during the inspection process. To test this theory, managers
devised a situation in which the same batch of parts was inspected visually at a variety of line
speeds. They collected the following data:

Line Speed (f Number of Defective Parts

20 21
20 19
40 15
30 16
60 14
40 17

1. Develop a scatter chart with line speed as the independent variable. What does the scatter chart indicate about t
2. Use the data to develop an estimated regression equation that could be used to predict the number of defective
3. Test whether each of the regression paramaters is equal to zero at 0.01 level of significance. What are the correct
4. How much of the variation in the number of defective parts found for the sample data does the model you estim
catter chart indicate about the relationship between line speed and the number of defective parts found?
ct the number of defective parts found, given the line speed. What is the estimated regression model?
cance. What are the correct interpretations of the estimated regression parameters? Are these interpretations reasonable?
a does the model you estimated in question #2? Explain
pretations reasonable?
 Jensen Tire & Auto is deciding whether to purchase a maintenance contract for its new computer wheel
alignment and balancing machine. Managers feel that maintenance expenses should be related to usage, and
they collected the following information on weekly usage (hours) and annual maintenance expense (in hundreds
of dollars)

Weekly Usage (hours) Annual Maintenance Expenses ($100s)

13 17
10 22
20 30
28 37
32 47
17 30.5
24 32.5
31 39
40 51.5
38 40

1. Develop a scatter chart with weekly usage hours as the independent variable. What does the scatter chart indicat
2. Use the data to develop an estimated regression equation that could be used to predict the annual maintenance
3. Test whether each of the regression parameters is equal to zero at 0.05 level of significance. What are the correct
4. How much of the variation in the sample values of annual maintenance expense does the model you estimated in
5. If the maintenance contract costs $3,000 per year, would you recommend purchasing it? Why or why not?
new computer wheel
e related to usage, and
nce expense (in hundreds

oes the scatter chart indicate about the relationship between weekly usage and annual maintenance expense?
ct the annual maintenance expense for a given number of hours of weekly usage. What is the estimated regression model?
cance. What are the correct interpretations of the estimated regression parameters? Are these interpretations reasonable?
the model you estimated in question #2? Explain
it? Why or why not?
 ated regression model?
rpretations reasonable?
Market Weekly Gross Revenue ($100s) Television Advertising
Mobile 101.3 5.0
Shreveport 51.9 3.0
Jackson 74.8 4.0
Birmingham 126.2 4.3
Little Rock 137.8 3.6
Biloxi 101.4 3.5
New Orleans 237.8 5.0
Baton Rouge 219.6 6.9

1. Develop an estimated regression equation with the amount of television advertising as the independent variable. Te
relationship between television advertising and weekly gross revenue at the 0.05 level of significance. What is the int
relationship?

2. How much of the variation in the sample values of weekly gross revenue does the model in #1? Explain

3. Develop an estimated regression equation with both television advertising and newspaper advertising as the inde
variables. Test whether each of the regression parameters is equal to zero at a 0.05 level of significance. What are th
interpretations of the estimated regression parameters? Are these interpretations reasonable?

4. How much of the variation in the sample values of weekly gross revenue does the model in #3 explain?

5. What are the managerial implications of these results

 Newspaper Advertising
1.5
3.0
1.5
4.3
4.0
2.3
8.4
5.8

the independent variable. Test for a significant

significance. What is the interpretation of this

model in #1? Explain

paper advertising as the independent

l of significance. What are the correct
nable?

odel in #3 explain?
 Overall
Satisfaction
Satisfaction Satisfaction
with Speed
Brokerage with Trade of
with
Price Electronic
Execution
Trades
Scottrade, I 3.4 3.4 3.5
Charles Sc 3.2 3.3 3.4
Fidelity Br 3.1 3.4 3.9
TD Ameritr 2.9 3.6 3.7
E*Trade Fin 2.9 3.2 2.9
(Not listed) 2.5 3.2 2.7
Vanguard B 2.6 3.8 2.8
USAA Broke 2.4 3.8 3.6
Thinkorsw 2.6 2.6 2.6
Wells Fargo 2.3 2.7 2.3
Interactive 3.7 4.0 4.0
Zecco.com 2.5 2.5 2.5
Firstrade Se 3.0 3.0 4.0
Banc of Ame 4.0 1.0 2.0

1. Develop an estimated regression equation using trade price and speed of execution to predict overall satisfaction w

2. Use the t test to determine the significance of each independent variable. What are your conclusions at the 0.05 lev

3. Interpret the estimated regression parameters. Are the relationships indicated by these estimates what you would

4. Finger Lakes Investments has developed a new electronic trading system and would like to predict overall custome

5. What concerns (if any) do you have with regard to the possible responses the respondents could select on the sur
edict overall satisfaction with the broker. Interpret the coefficient of determination.

conclusions at the 0.05 level of significance?

estimates what you would expect?

e to predict overall customer satisfaction assuming they can provide satisfactory service levels (3) for both trade price and speed

nts could select on the survey.

both trade price and speed of execution. Use the estimated regression equation developed in #1 to predict overall satisfaction l
predict overall satisfaction level for Finger Lakes Investments if they can achieve these performance levels.