Regression Homework #1

Patrick Ulrich

y = 0.4567x + 1430.8 y = 0.4419x + 714.83

Utility Cost vs. Machine Hours Utility Cost vs. Labor Hours
R2 = 0.4188 R2 = 0.8739

$2,750 $2,800
$2,700 $2,750
$2,650 $2,700
Utility Costs

Utility Costs
$2,650
$2,600
$2,600
$2,550
$2,550
$2,500
$2,500
$2,450 $2,450
$2,400 $2,400
2,300 2,400 2,500 2,600 2,700 2,800 3,900 4,000 4,100 4,200 4,300 4,400 4,500 4,600 4,700
Machine Hours Labor Hours

3.) Based on the plot above I would assume
that a linear relationship would not exist. My
assumption is made due to the many markings
that fall so far from the trend-line.
4.) From the plot I would assume that the cost
driver does not make a good fit for explaining
the costs. Since so many lines fall so far from
the trend-line it makes me believe that it would
be too far random.
3.) From the plot above I would assume that
there is a linear relationship with the data. I
find this to be true from how most of the
markings fall relatively close to the trend-line,
unlike the machine hours which fall far from
the line at times.
4.) This does make a good fit I would assume
to explain that labor hours are indeed the best
view of what’s driving costs. Most of the plots
fall on or near the line leading me to believe
that it is a very good fit to explain the costs.