Question

A statistical program is recommended.

A sales manager collected the following data on x = years of experience and y = annual sales ($1,000s). The estimated regression equation for these data is

ŷ = 82 + 4x.

Salesperson	Years of Experience	Annual Sales ($1,000s)
1	1	80
2	3	97
3	4	102
4	4	107
5	6	103
6	8	101
7	10	119
8	10	128
9	11	127
10	13	136

(a) Compute the residuals.

Years of Experience	Annual Sales ($1,000s)	Residuals
1	80
3	97
4	102
4	107
6	103
8	101
10	119
10	128
11	127
13	136

Answer 1

Formula to calculate residuals is:

The residuals are using this formula :

Observation	Years of Experience	Annual Sales ($1,000s)	Predicted Annual Sales ($1,000s) :	Residuals
1	1	80	86	-6
2	3	97	94	3
3	4	102	98	4
4	4	107	98	9
5	6	103	106	-3
6	8	101	114	-13
7	10	119	122	-3
8	10	128	122	6
9	11	127	126	1
10	13	136	134	2

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