Generate a scatterplot for CREDIT BALANCE vs. SIZE, including the graph of the “best fit” line. Interpret. Determine the equation of the “best fit” line, which describes the relationship between CREDIT BALANCE and SIZE. Interpret the values for slope and

20180613034048project_data___reliable_housewares_201830_.xlsx20180613034118part_c x
 

1. Generate a scatterplot for CREDIT BALANCE vs. SIZE, including the graph of the “best fit” line. Interpret.
2. Determine the equation of the “best fit” line, which describes the relationship between CREDIT BALANCE and SIZE. Interpret the values for slope and intercept.
3. Determine the coefficient of correlation. Interpret.
4. Determine the coefficient of determination. Interpret.
5. Test the utility of this regression model (use a two tail test with α =.05). Interpret your results, including the p-value.
6. Based on your findings in 1-5, what is your opinion about using SIZE to predict CREDIT BALANCE? Explain.
7. Compute the 95% confidence interval for β1 (the population slope). Interpret this interval.
8. What can we say about the credit balance for a customer that has a household size of 10? Explain your answer.

In an attempt to improve the model, we attempt to do a multiple regression model predicting CREDIT BALANCE based on INCOME, SIZE and YEARS.

1. Using Excel run the multiple regression analysis using the variables INCOME, SIZE and YEARS to predict CREDIT BALANCE. State the equation for this multiple regression model.
2. Perform the Global Test for Utility (F-Test). Explain your conclusion.
3. Perform the t-test on each independent variable. Explain your conclusions and clearly state how you should proceed. In particular, which independent variables should we keep and which should be discarded.
4. Is this multiple regression model better than the linear model that we generated in parts 1-8? Explain.

2

>Sheet

1

00)

2 12

4

Suburban

5

Rural

2 4

Urban

2 9

Rural

1

Urban

2 7

Suburban

4 10

Urban

3

0

Urban

3 11

Urban 48 4 16

Rural

1 19

Rural

2 12

Urban

3 12

4

Suburban

4

Urban 55 6 15

2

Urban 21 2

8

Rural 44 1 7

Urban 37 5 5

1

Suburban

6 13

8

Urban 21 3 16

Suburban 55 7 15

Rural 42 2 19

Urban 41 7 18

Suburban

6 14

Rural 30 1 14

Urban 48 2 8

Urban

5 5

Suburban 67 4 13

Rural 50 2 11

Urban 67 5 1

Urban 55 6 10

Urban

2 11

Urban 62 3 2

Urban 64 2 6

Suburban

3 18

Urban

4 4 3,890

Suburban

2 18

Rural

1 11

Urban 39 4 15

Suburban 54 3 9

Suburban 23 6 18

Rural 27 2 1

Urban

7 17

Suburban

2 14

Rural 30 2 14

Rural 22 4 16

Suburban

5 13

Suburban 66 4 20

Rural

1 7

Urban 44 6 5

Suburban 74 7 12

Urban 25 3 15

Suburban 66 7 14

Location	Income ($		10	Size	Years	Credit Balance ($)
																							Urban									5											4									3					12	4,0 Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper		1							6
													Rural			30	3,				15		9
																Suburban	32	1								7	5,100
	50						14	4,7	42
31	1,	8	64
			55	4,070
	37		20	2,731
40	3,3		48
		66	4,764
51		16	4,				11
	25	4,208
4,2		19
	27	2,477
33	2,514
65	4,		21
63				13	4,965
4,	41
				18	2,		44
2,995
4,	17
	62	5,		67
3,6	23
5,301
3,020
4,828
	54	5,573
2,583
3,866
34	3,586
5,037
3,605
5,345
5,370
52		3,890
4,705
4,157
	22	3,899
29
	39	2,972
35	3,121
4,183
3,730
4,127
2,921
26	4,603
61	4,273
3,067
3,0	74
46	4,820
5,149
53	2845
3962
5394
3442
5036

Sheet2

Sheet3

PROJECT PART C

Reliable Housewares is a local store that sells many household items and issues its own credit card to its customers. The store manager wants to study the purchasing behavior of its “credit” customers. To that end, he has come to DeVry and asked our MBA students for help. The manager has brought with him data on five variables of 55 randomly selected credit customers.

· LOCATION (Rural, Urban, Suburban – Household location of the credit customer)

· INCOME (in $1,000’s – be careful with this)

· SIZE (Household Size – number of people living in the household of credit customer)

· YEARS (the number of years that the customer has lived in the current location)

· CREDIT BALANCE ($ balance on customer’s store credit card)

Regression and Correlation Analysis

Using Excel perform the regression and correlation analysis for the data on CREDIT BALANCE (Y) and SIZE (X) by answering the following.

1. Generate a scatterplot for CREDIT BALANCE vs. SIZE, including the graph of the “best fit” line. Interpret.

2. Determine the equation of the “best fit” line, which describes the relationship between CREDIT BALANCE and SIZE. Interpret the values for slope and intercept.

3. Determine the coefficient of correlation. Interpret.

4. Determine the coefficient of determination. Interpret.

5. Test the utility of this regression model (use a two tail test with α =.05). Interpret your results, including the p-value.

6. Based on your findings in 1-5, what is your opinion about using SIZE to predict CREDIT BALANCE? Explain.

7. Compute the 95% confidence interval for β1 (the population slope).  Interpret this interval.

8. What can we say about the credit balance for a customer that has a household size of 10? Explain your answer.

In an attempt to improve the model, we attempt to do a multiple regression model predicting CREDIT BALANCE based on INCOME, SIZE and YEARS.

9. Using Excel run the multiple regression analysis using the variables INCOME, SIZE and YEARS to predict CREDIT BALANCE. State the equation for this multiple regression model.

10. Perform the Global Test for Utility (F-Test). Explain your conclusion.

11. Perform the t-test on each independent variable. Explain your conclusions and clearly state how you should proceed. In particular, which independent variables should we keep and which should be discarded.

12. Is this multiple regression model better than the linear model that we generated in parts 1-8? Explain.

Summarize your results from 1-12 in a report that is three pages or less in length and explains and interprets the results in ways that are understandable to someone who does not know statistics.

Submission: A report in Microsoft Word containing the summary report + all of the work done in 1-12 (Excel Output + interpretations) as an appendix.

Report Format:

A. Summary Report

B. Bullets 1-12 addressed with appropriate Excel outputs, graphs and interpretations. Be sure to number each bullet 1-12.

Project Part C: Grading Rubric

Category

Points

Description

Questions 1 – 10 and 12 – 6 pts. each

66

addressed with appropriate output, graphs and interpretations

Question 11

15

addressed with appropriate output, graphs and interpretations

Executive Summary

19

writing, grammar, clarity, logic, and cohesiveness

Total

100

A quality paper will meet or exceed all of the above requirements.

Optional

· Using an interval, estimate the average credit balance for customers that have household size of 5. Interpret this interval.

· Using an interval, predict the credit balance for a customer that has a household size of 5. Interpret this interval.

2 | Page