Name: Madayag, Alliah Denise A.

Section: B-212
Assignment Module 10 SLR

1. The Insurance Institute for Highway Safety has listed the following ratings based on collision
and comprehensive claims for nine makes of midsize four-door cars from 2014-2016 model
years. Higher numbers reflect higher claims in the collision and comprehensive categories of
coverage.

Collision claim Comprehensive

Claims 𝑿∙𝒀 𝑿𝟐 𝒀𝟐
rating (X) claim rating (Y)
1 113 89 10,057 12,769 7,921
2 108 91 9,828 11,664 8,281
3 124 92 11,408 15,376 8,464
4 131 108 14,148 17,161 11,664
5 128 108 13,824 16,384 11,664
6 90 74 6,660 8,100 5,476
7 99 79 7,821 9,801 6,241
8 106 86 9,116 11,236 7,396
9 116 98 11,368 13,456 9,604
Total 1,015 825 94,230 115,947 76,711

A. Determine the slope value

𝑛 ∑ 𝑥𝑦 − ∑ 𝑥 ∑ 𝑦
𝑆𝑙𝑜𝑝𝑒 (𝑏 𝑜𝑟 𝑏1 ) =
𝑛 ∑ 𝑥 2 − (∑ 𝑥)2
9 (94,230) − (1,015) (825)
=
9 (115,947) − (1,015²)
10,695
=
13,298
= 𝟎. 𝟖𝟎𝟒
B. Determine the y-intercept value
∑𝑦 − 𝑏 ∑𝑥
𝑌 − 𝑖𝑛𝑡𝑒𝑟𝑐𝑒𝑝𝑡 (𝑎 𝑜𝑟 𝑏0 ) =
𝑛
825 − 0.804 (1,015)
=
9
8.94
=
9
= 𝟎. 𝟗𝟗

C. Develop the linear regression equation or model

𝐿𝑖𝑛𝑒𝑎𝑟 𝑒𝑞𝑢𝑎𝑡𝑖𝑜𝑛 𝑚𝑜𝑑𝑒𝑙 = 𝒀 = 𝟎. 𝟗𝟗 + 𝟎. 𝟖𝟎𝟒𝑿
 Name: Madayag, Alliah Denise A.
Section: B-212
Assignment Module 10 SLR

D. Predict the comprehensive claim rating for a collision rating of 130

𝑌 = 0.99 + 0.804𝑋
= 0.99 + 0.804 (130)
= 𝟏𝟎𝟓. 𝟓𝟏
E. Describe the coefficient of correlation
𝑛(∑ 𝑥𝑦) − (∑ 𝑥) ∙ (∑ 𝑦)
𝑟=
√n(∑ x2) − (∑ x)2 ∙ √n(∑ y2) − (∑ y)2
9(94,230) − (1,015) ∙ (825)
=
√9(115,947) − (1,015)2 ∙ √9(76,711) − (825)2
= 𝟎. 𝟗𝟑𝟖𝟏
 The R-value of 0.9381 reflects the very high positive relationship of the collision claim
rating and comprehensive claim rating.

F. Describe the coefficient of determination

𝑟 2 = 0.93812
= 𝟎. 𝟖𝟖𝟎𝟎 𝐨𝐫 𝟖𝟖. 𝟎𝟎%
 The 𝑟 value suggests that 88.00 % of the changes in the collision claim rating can be
2

explained by the changes in the comprehensive claim rating, and the 12.00 % are
caused by unexplained factors.

2. A mail-order catalog business that sells personal computer supplies, software, and hardware
maintains a centralized warehouse for the distribution of products ordered. Management is
currently examining the process distribution from the warehouse and is interested in studying
the factors that affect warehouse distribution costs. Currently, a small handling fee is added to
the order, regardless of the amount. The table below shows the data (distribution costs in
thousands of dollars and number of orders) collected for the past 12 months.

Distribution Number of
Month 𝑿∙𝒀 𝑿𝟐 𝒀𝟐
costs (X) orders (Y)
1 52.95 4015 212,594.25 2,803.70 16,120,225.00
2 71.66 3806 272,737.96 5,135.16 14,485,636.00
3 85.58 5309 454,344.22 7,323.94 28,185,481.00
4 63.69 4262 271,446.78 4,056.42 18,164,644.00
5 72.81 4296 312,791.76 5,301.30 18,455,616.00
6 68.44 4097 280,398.68 4,684.03 16,785,409.00
Name: Madayag, Alliah Denise A.
Section: B-212
Assignment Module 10 SLR
7 52.46 3213 168,553.98 2,752.05 10,323,369.00
8 70.77 4809 340,332.93 5,008.39 23,126,481.00
9 82.03 5237 429,591.11 6,728.92 27,426,169.00
10 74.39 4732 352,013.48 5,533.87 22,391,824.00
11 70.84 4413 312,616.92 5,018.31 19,474,569.00
12 54.08 2921 157,967.68 2,924.65 8,532,241.00
Total 819.70 51,110 3,565,389.75 57,270.73 223,471,664.00

A. Determine the slope value

𝑛 ∑ 𝑥𝑦 − ∑ 𝑥 ∑ 𝑦
𝑆𝑙𝑜𝑝𝑒 (𝑏 𝑜𝑟 𝑏1 ) =
𝑛 ∑ 𝑥 2 − (∑ 𝑥)2
12 (3,565,389.75) − (819.70) (51,110)
=
12 (57,270.73) − (819.70²)
889,810
=
15,341
= 𝟓𝟖. 𝟎𝟎𝟑
B. Determine the y-intercept value
∑𝑦 − 𝑏 ∑𝑥
𝑌 − 𝑖𝑛𝑡𝑒𝑟𝑐𝑒𝑝𝑡 (𝑎 𝑜𝑟 𝑏0 ) =
𝑛
51,110 − 58.003 (819.70)
=
12
3,564.66
=
12
= 𝟐𝟗𝟕. 𝟎𝟖

C. Develop the linear regression equation or model

𝐿𝑖𝑛𝑒𝑎𝑟 𝑒𝑞𝑢𝑎𝑡𝑖𝑜𝑛 𝑚𝑜𝑑𝑒𝑙 = 𝒀 = 𝟐𝟗𝟕. 𝟎𝟖 + 𝟓𝟖. 𝟎𝟎𝟑𝐗

D. Predict the number of orders for a distribute costs of 90.25 (in thousand dollars).
𝑌 = 297.08 + 58.003𝑋
= 297.08 + 58.003(90.25)
= 𝟓, 𝟓𝟑𝟏. 𝟖𝟓
E. Describe the coefficient of correlation
𝑛(∑ 𝑥𝑦) − (∑ 𝑥) ∙ (∑ 𝑦)
𝑟=
√n(∑ x2) − (∑ x)2 ∙ √n(∑ y2) − (∑ y)2
12(3,565,389.75) − (820) ∙ (51,110)
=
√12(57,270.73) − (820)2 ∙ √12(223,471,664) − (51,110)2
= 𝟎. 𝟖𝟔𝟐𝟐
 The R-value of 0.8622 reflects the high positive relationship of the distribution costs
and number of orders.
Name: Madayag, Alliah Denise A.
Section: B-212
Assignment Module 10 SLR

F. Describe the coefficient of determination

𝑟 2 = 0.86222
= 𝟎. 𝟕𝟒𝟑𝟒 𝐨𝐫 𝟕𝟒. 𝟑𝟒%
 The 𝑟 value suggests that 74.34% of the changes in the distribution costs can be
2

explained by the changes in the number of orders, and the 25.66% are caused by
unexplained factors.