Question

So, as we look at Linear Regression and correlation this week, please find provide an example of how and when linear regression is used.

Answer 1

We use linear regression or correlation when we want to know whether one measurement variable is associated with another measurement variable; we can measure the strength of the association (r2); we can also use regression to form an equation that describes the relationship which can be used to predict unknown values.

Example:

Linear regressions can be used in business to evaluate trends and make estimates or forecasts.

It can be used to forecast the demand of a commodity say cereals to be ordered for next month by a supermarket using the past data.