In a random sample of eight military contracts involving cost overruns, the following information was obtained. x = big price of the contract (in millions of dollars) and y = cost of overrun (expressed as a percent of the bid price).
x 6 10 3 5 9 18 16 21
y 31 25 39 35 29 12 17 8
a) Draw the scatter diagram for this data.
b) Find the slope, b, and the intercept, a, for the least-squares line. Write the equation of the least-squares line.
c) Graph the least-squares line on your scatter diagram.
d) If an overrun contract was bid at 12 million dollars, what does the least-squares line predict for the cost of overrun (as a percent of bid price)?
A scatter diagram for the data is given. The slope and intercept for the least-squares line is determined and the equation is given.