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Develop a linear equation that can be used to describe how the price depends on the processor speed.

My workgroup wants to move from desktop to laptop computers so that we can work remotely without having to access our network from "foreign"computers, which is greatly frowned upon. Because we don't have an actual budget for the purchase of the laptops, we would like to present research showing justification for the type of laptop we choose. Based on past experience, we prefer Dell products, but would like to also consider HP/Compaq, Sony Vaio and Toshiba. Like all users though, we have a "need for speed." Therefore, we have decided to research the aforementioned brands for price compared to processing speed. Our goal is to determine which laptops are over/under-priced based on processing speed and use this information to in our presentation to management.

The following data shows the retail price for 12 randomly selected laptop computers along with their corresponding processor speeds.
Laptop Price Speed
Dell Inspiron 1501 $599 1.80
Dell Inspiron 1405 $749 1.66
Dell Inspiron 1505 $749 2.16
Dell XPS M1210 $1,299 2.00
Dell XPS M1710 $2,299 2.00
Dell XPS M2010 $2,999 2.00
HP Compaq nc8430 $1,399 1.83
HP Compaq nw8440 $1,999 1.83
HP Compaq nc2400 $1,549 1.06
Sony Vaio VGN-FE880E/H $1,300 1.66
Toshiba Satellite A135-S2246 $650 1.73
Portege R400-S4831 $2,495.04 2.00

a. Develop a linear equation that can be used to describe how the price depends on the processor speed.
b. Based on your regression equation, is there one machine that seems particularly over- or underpriced?
c. Compute the correlation coefficient between the two variables. At the .05 significance level conduct a test of hypothesis to determine if the population correlation could be greater than zero.
d. draw a box plot reflecting how the price depends on the processor speed.

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Please see the attached file.

The r-square for the regression is 0.043, which is ...

Solution Summary

Excel regression and document attached assist you in interpreting and reporting the regression results.

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