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Regression analysis

Please see the attached file.

Please answer these questions based on the data file Packages.

a. Develop a scatter plot of the data with the dependent variable, cost, on the vertical axis and the independent variable, weight, on the horizontal axis. Does there appear to be a relationship between the two variables? Is the relationship linear?
b. Compute the sample correlation coefficient between the two variables. Conduct a test, using a significance level of 0.05, to determine whether the population correlation coefficient is significantly different from zero.
c. Using a simple linear regression equation to predict the cost of shipping various items. Would you recommend it use a second-order polynomial model instead? Is the second-order polynomial model a significant improvement on the simple linear regression equation?
d. A decision was made to stop shipping products if the shipping charges exceed $100. The company has asked you to determine the maximum weight for future shipments. Do this for both the first - and second-order models you have developed.


Solution Summary

Step by step method for regression analysis is discussed here. Regression coefficients, coefficient of determination, scatter diagram and significance of regression model are explained in the solution.