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Case problem on North-south airline: Regression Analysis

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1. Prepare a Peg Jone's response to Stephen Ruth.

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Pegâ€™s response to Stephen Ruth

Using Excel, four regression equations are developed for the Cost Vs Age. Following are the equations:

For Northern Airlines:

Airframe maintenance cost = 36.097 + Average fleet age * 0.0026
Coefficient of Correlation, r=0.877
Coefficient of Determination, r2 = 0.769

Engine maintenance cost = 20.571 + Average fleet age * 0.0026
Coefficient of Correlation, r=0.783
Coefficient of Determination, r2 = 0.612

It can be seen from the r2 value of 0.769 that there is a moderate relationship between the Air frame maintenance cost and the Air fleet age. This means that Air fleet age determines only 76.9% of variation ...

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