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Pearson's Correlation Coefficient and Regression Equation

The following table represents data involving direct labour costs (in Rands) and the batch size (in units) produced by a small manufacturing concern that specialises in a single product.

BATCH SIZE (units) LABOUR COSTS (Rands)
15 200
18 240
21 290
23 300
26 380
28 370
32 400

1. Determine Pearson's correlation coefficient and comment on the value obtained.

2. Obtain a regression equation representing the above data.

3. Estimate the production batch size for a direct labour cost of R350-00.

Solution Summary

This solution determines Pearson's correlation coefficient and regression equation from an ANOVA analysis. It also uses the regression equation to estimate the product batch size for a specific direct labour cost.

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