UVA-QA-0416

Para uso exclusivo en el Programa Executive MBA Fin de Semana 2019 - 2021 en INALDE * 19 - 26 de octubre de 2019

PROBLEMS IN REGRESSION

1. Union Camp-Trenton
An important element in the scheduling procedure of the Union Camp Corporation’s
corrugated container plant in Trenton, New Jersey, involved forecasting the amount of
processing time each job would require at each work center. One piece of information
available was the number of thousands of square feet (MSF) in the job. Data for 15 randomly
selected jobs processed on a particular printing press follow:
MSF Hours
26.0 2.00
34.2 4.17
29.0 4.42
34.3 4.75
85.9 4.83
143.2 6.67
85.5 7.00
140.6 7.08
140.6 7.17
40.4 7.17
101.0 10.00
239.7 12.00
179.3 12.50
126.5 13.67
140.8 15.08
Can regression be used to provide a forecast? Two jobs waiting to be processed contained
157.3 MSF and 64.7 MSF. What is the probability that the first, larger job will take less than
8 hours to process? What is the probability that the second, smaller job will take less than 8
hours?

This case was written by Phillip E. Pfeifer. It was written as a basis for class discussion rather than to illustrate an
effective or ineffective situation. Copyright  1991 by the University of Virginia Darden School Foundation,
Charlottesville, VA. All rights reserved. To order copies, send an e-mail to sales@dardenbusinesspublishing.com. No
part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any
form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of the
Darden School Foundation. Rev. 1/95.
 -2- UVA-QA-0416
Para uso exclusivo en el Programa Executive MBA Fin de Semana 2019 - 2021 en INALDE * 19 - 26 de octubre de 2019

2. South Wales Mining Company

The South Wales Mining Company often needs to make rapid and exact estimates of the
weight of a pile of lose materials, such as coal. To help do that more accurately, the company
compiled information about 10 coal piles for which the actual weight was known. The
information consisted of the diameter of the base of the pile (D), the diameter of the top of
the pile (d), and the height of the pile (h). These distances are all given in units of feet, and
the weight (W) of the coal pile is given in metric tons.

Diameter Diameter
Weight of the of the top
(W) base (D) Height (h) (d)
56 20 10 15
93 25 10 20
161 30 12 24
31 15 12 10
70 20 14 13
76 20 14 13
375 40 16 32
34 15 14 8
45 20 8 16
58 20 10 15

Figure 1. Calculating weight.1

How should South Wales Mining combine information in D, h, and d to predict the weight of
a pile of coal?

1
Figure from Samuel E. Bodily, Robert L. Carraway, Sherwood C. Frey, Jr., and Phillip E. Pfeifer, Quantitative
Business Analysis: Text and Cases (New York: McGraw Hill Primus Custom Publishing, 2002).
 -3- UVA-QA-0416
Para uso exclusivo en el Programa Executive MBA Fin de Semana 2019 - 2021 en INALDE * 19 - 26 de octubre de 2019

3. Longevity and Handedness

In the early 1990s, two psychologists surveyed the next of kin listed on public death
certificate records in two counties in Southern California. The survey asked the handedness
of the recently deceased family member. Subjects were labeled right-handers, if they wrote,
drew, and threw a ball with their right hand. All other subjects were labeled as left-handers.
Next of kin of young children and homicide victims were not surveyed.
The age of death (AOD) of the 867 right-handers averaged 75.00 years. The AOD of the 82
left-handers averaged 66.03. A dummy variable was created representing the handedness of
the subjects:
1 if subject was right-handed
DR =
{ 0 if the subject was mixed or left-handed
and a regression analysis performed relating AOD to DR. The results appear below:

Regression Statistics
Multiple R 0.1518763
R square 0.0230664
Adjusted R square 0.0220348
Standard error 16.418869
Observations 949

ANOVA
df SS MS F Significance F
Regression 1 6027.699921 6027.7 22.35966 2.60415E-06
Residual 947 255291.5539 269.5793
Total 948 261319.2538

Coef. Std. Error t Stat P-value Lower 95% Upper 95%

Intercept 66.03 1.813160744 36.41707 2.9E-182 62.4717241 69.588276
X Variable 1 8.97 1.89696739 4.7286 2.6E-06 5.247255964 12.692744

What is your explanation for the rather surprising results?

 -4- UVA-QA-0416
Para uso exclusivo en el Programa Executive MBA Fin de Semana 2019 - 2021 en INALDE * 19 - 26 de octubre de 2019

4. Market Study
In a market-segmentation study, data on net income (I) in thousands, family size (F), and
expenditures on consumer durable goods (C) were collected from 20 randomly selected
households:
I F C
10 4 1,960
10 3 2,390
15 4 3,060
15 5 3,220
20 6 3,570
20 5 4,360
25 7 4,970
25 6 5,190
30 8 5,390
30 7 5,550
The company sponsoring the study was interested in isolating the effects of income and
family size on the dollar amounts spent for consumer durable goods.
 -5- UVA-QA-0416
Para uso exclusivo en el Programa Executive MBA Fin de Semana 2019 - 2021 en INALDE * 19 - 26 de octubre de 2019

5. Class Participation
There is a popular notion that students sitting on the right side (right from a student’s
perspective) of the classroom are called on more often than students on the left. Ten
students, randomly selected from each side of one of last year’s QA sections, had the
following numerical class participation grades:
Right Side Left Side
14 8
19 9
19 10
17 20
13 10
13 13
16 17
4 5
12 3
12 8
Use regression with a dummy variable to test the notion that the average class participation
grade is higher on the right side of the class.