Question

Carlson Mining, Inc. has 12 large pumps that pump water from the mines it operates.
Management has been concerned lately about the amount of money required to
repair malfunctioning pumps. These costs are sums over and above the amounts
spent for routine maintenance. When asked what factors they thought might affect
the mean monthly repair costs, employees suggested the age of the pumps and the
number of hours of operation. The following information was collected.
Choose the relevant Summary Output to answer the questions. Note that the
mean monthly repair costs are in dollars, so when questions ask about repair
costs, make sure that your answers reflect that.
Mean Weekly Hours of Operation over Past Year	Age of Pump at First of Year (months)	Mean Monthly Repair Costs over Past Year
28	80	$1,049
26	48	$1,095
15	27	$882
12	2	$447
16	13	$715
21	55	$542
13	30	$415
21	35	$454
16	36	$495
12	13	$370
18	28	$448
18	49	$509

Develop an estimated regression equation to predict mean monthly repair costs with
both the mean weekly hours of operation and the age of the pumps as the
explanatory variables.
According to your equation, holding the mean weekly hours of operation constant,
for every additional month of age, the mean monthly repair costs (increase / do not
change / decrease) by _____. ROUND APPROPRIATELY AND INCLUDE
THE UNITS!

Answer 1

Excel:

Data --> Data analysis --> Regression

	Coefficients	Standard Error	t Stat	P-value
Intercept	-87.70037103	261.5249413	-0.33534	0.745051
Mean Weekly Hours of Operation over Past Year	45.09732343	21.8704701	2.062019	0.069253
Age of Pump at First of Year (months)	-3.047157232	5.329493207	-0.57175	0.581485

Ans :

(i) yhat = -87.7004+45.0973(Mean Weekly Hours of Operation)-3.0472(Age of Pump at First of Year)

(ii) Decrease by 3.0472 dollars