Subject : Applied Statistics Code

FACULTY OF INDUSTRIAL SCIENCES & TECHNOLOGY

SEMESTER 1 2013/2014 ASSIGNMENT 2

: BUM 2413

ASSIGNMENT DUE DATE : 19 DECEMBER 2013 (before 5.00 pm)

INSTRUCTI NS:

TOTAL MARK: 40

1. Set up a group that consists of between !"ree (3) and f#$e (5) members and name your group using any statistical term. 2. Data for this assignment should be downloaded from the filename Assignment 2 Data.xlsx 3. All data should be analysed using Microsoft Excel. 4. Copy and paste all the relevant outputs in your report. . !se the p-value me!"o% in the hypothesis testing.
ATTENTI N& '(!e )*bm#))#o+ of ())#,+me+! -#.. +o! be e+!er!(#+e%.

/UESTI N 1

Differentiate between simple and multiple linear regression analysis. "ive your own e#ample to illustrate simple and multiple linear regression analysis. (5 M(r0)) S#mp.e .#+e(r re,re))#o+ Simple linear regression model is a model with a single independent variable x that has a relationship with a response variable y and it can be represented by an e$uation of a straight line. %e predict scores on one variable from the scores on a second variable. 'he e#ample data in 'able 1 are plotted in -igure 1. .ou can see that there is a positive relationship between / and .. 0f you were going to predict . from /) the higher the value of /) the higher your prediction of .. 'able 1. 1#ample data 1 1.00 2.00 3.00 4.00 5.00 2 1.00 2.00 1.30 3.75 2.25 M*.!#p.e .#+e(r re,re))#o+ &ultiple linear regression model is used to describe linear relationship involving more than two variable. 'he multiple linear regression e$uation e#presses a linear relationship between a response variable y and two more predictor variables (#1) #2)*.)#+,. 'he multiple linear regression e$uation identify the plane that gives the best fit to the data.

/UESTI N 2

0t is noted that cost of petrol in 2& per litre depends on percentage cost of refining) percentage of distribution and mar+eting) percentage of ta#es and percentage of crude oil. !se the given data to answer the following $uestions. (a, 0dentify the independent and dependent variables. (1 M(r0) Depe+%e+! 3 cost of petrol in 2& per litre. I+%epe+%e+! #1 3 percentage cost of refining #2 3 percentage of distribution and mar+eting #3 3 percentage of ta#es and percentage of crude oil. #4 3 percentages of crude oil

(b,

Draw scatter plot with line of best fit for each of the variables and give your comments. (2 M(r0))

r 3 4.3563 shows a wea+ positive linear correlation. 'here is a wea+ positive linear relationship between the cost of petrol in 2& per litre depends on percentage cost of refining. 'he higher cost of petrol in 2& per litre give the higher percentage cost of refining.

Cost of gasoline

X2

r 3 4.2 52 shows a wea+ positive linear correlation. 'here is a wea+ positive linear relationship between the cost of petrol in 2& per litre depends on percentage of distribution and mar+eting. 'he higher cost of petrol in 2& per litre give the moderate percentage cost of distribution and mar+eting.

X3

r 3 4.7288 shows a strong positive linear correlation. 'here is a strong positive linear relationship between the cost of petrol in 2& per litre depends on percentage of ta#es. 'he higher cost of petrol in 2& per litre give the higher percentage cost of ta#es.

r 3 4. 613 shows a moderate positive linear correlation. 'here is a moderate positive linear relationship between the cost of petrol in 2& per litre depends on percentage of ta#es. 'he higher cost of petrol in 2& per litre give the higher percentage cost of crude oil.

(c,

9ased on the drawn scatter plots) perform the simple linear regression analysis which represents strongest association between the independent and dependent variables. (i, Comment on correlation coefficient and coefficient of determination.

Correlation coefficient /3 r 3 4.7288 shows a strong positive (:ercentage linear correlation. 'here is a strong of ta#es, positive linear relationship between the cost of petrol in 2& per litre depends on percentage of ta#es. 'he higher cost of petrol in 2& per litre give the higher percentage cost of ta#es.

Coefficient of determination 22 3 4. 326 3.26 ; of the variation in y can be e#plained by the # or 3.26 ; of the variation in y is predictable from #.

(ii,

%rite the e$uation of the simple linear regression model < 32.6854 = 4.4462x

(iii,

predict the costs of petrol when the variable increase to 74;. #3 y 3 2.6854 = 4.4462# 3 2.6854 = 4.4462(4.7, 3 2.6523

(iv,

test for significance of regression at = 4.41 . >4? the slope of regression line is @ero or A13 4 >1? the slope of regression line is not @ero or A1 B 4 (pCvalue3 1.64333 / 14 C8 , D ( = 4.41 ,) reEect >4. 'herefore) there is a linear relationship between the cost of gasoline (y, and the percentage cost of ta#es (x,. >ence) the regression line e$uation is < 32.6854 = 4.4462x

(v, :erform hypothesis testing for intercept at = 4.4 .

>4? the slope of regression line is @ero or A4 3 4 >1? the slope of regression line is not @ero or A4 B 4 Coefficient 2.6854 C 4.4462 ' Stat :Cvalue 1 .6714 8.84 55 14C21 C7.3868 1.6433314 C48

0ntercept /3

0ntercept? (:Cvalue 31.64333 / 14 C8, D (F 3 4.4 ,) reEect > 4. 'hat is the intercept of regression line is not @ero. (14 M(r0)) (d, :erform multiple linear regression analysis for all the given variables. (i, # #1) #2) #3) #4 #1) #2) #3 #1) #2) #4 #1 ) #3 ) #4 #2) #3) #4 #1) #2 #1) #3 #1) #4 #2) #3 #2)#4 #3) #4 #1 #2 #3 #4 Summarise all the outputs in a table :Cvalue 2.44276 / 14 C14 5.6 / 14 C14 7.84 / 14 C12
3.41 / 14 C14

22 4.7637 4.52 4.5824 4.7 7 4.512 4.1436 4.5241 4.51 4. 7 1 4.3452 4. 831 4.13 7 4.45 7 4. 326 4.3378

AdEuste d 22 4.7544 4.5411 4.5724 4.7417 4. 672 4.1474 4.5444 4. 881 4. 74 4.3164 4. 7 6 4.1177 4.4452 4. 231 4.3241

2egression e$uation. < 3 C 4.4377 G 4.4426x1 G 4.4177x2 C4.42 x3 G 4.4446x4 < 3 2.53 5 G4.4168x1 = 4.4455x2 C4.4451x3 < 3 C2.3281G 4.4 5x1 G 4.4265x2 G 4.4 86x4 < 3 4.4818 G 4.4324x1 = 4.4344x3 G 4.431 x4 < 3 2.4614 = 4.411x2 = 4.4387x3 G 4.4151x4 < 3 1.3182 G 4.423 x1 = 4.4462x2 < 3 2. 143 G 4.4218x1 = 4.4452x3 < 3 C1.2462 G 4.4444x1 G 4.4481x4 < 3 3.4754 = 4.4154x2 G4.4473x3 < 3 C4.446 = 4.4475x2 G4.4364x4 < 3 1.7 21 = 4.4367x3 G 4.4185x4 < 3 1.1511 G 4.4271x1 < 3 1.6261 = 4.4244x2 < 3 2.6854 = 4.4462x3 < 3 C4.2343 G 4.4388x4 (5 M(r0))

1.46 / 14 C48 4.425438 1.32125 / 14C14 1.7543 / 14C14 1.64444 / 14C48 4.5 / 14 C4 5.5 / 14C14 4.4464685 4.472 1.64333 /14 C48 8. 8 /14 C45

(ii,

0f one predictor variable is used to predict the cost of petrol) which single variable is the bestH

Choose :ercentages of ta#es(#3,? < 3 2.6854 = 4.4462x3 with (:Cvalue 3 1.6433314C 48 , D (F34.4 , (significant effect, and high correlation 22 3 4. 326 (2 M(r0)) (iii, 0f two predictor variables are used to predict the cost of petrol) which model is the bestH Choose :ercentage cost of refining) :ercentages of ta#es (#1) #3,? < 3 2. 143 G 4.4218x1 = 4.4452x3 with (:Cvalue 3 1.32125/ 14C14, D (F34.4 , (significant effect, and high correlation 22 3 4.5241 (2 M(r0)) (iv, Choose the best regression e$uation model for predicting the cost of petrol. Iustify your answer. Choose :ercentage cost of refining) :ercentages of ta#es) :ercentages of crude oil (#1) #3) #4,? < 3 4.4818 G 4.4324x1 = 4.4344x3 G 4.431 x4with (:Cvalue 3 3.414 #14 C14 , D (F34.4 , (significant effect, and high correlation 22 3 4.7 7 (3 M(r0))

ASSIGNMENT 2 BUM2613 A77'IED STATISTICS

NAME %AJ JKK2-AL0MA> 90J'0 %AJ .!SK-J!2 0--A> S.ALA 90J'0 N>AM0M &K>A&&AD N>A0L!M A--0LA& 90J AM0 &!>A&&AD AM0- 90J S>A&S!20 STUDENT ID C912444 C912474 :9114 5 CA114 4 SECTI N 47" 47" 47" 47"

'ECTURER DR. M 8D RAS8ID BIN AB 8AMID 9 R E1AMINER USE &ar+s N'2

Ouestion number 1 2 3 4 To!(. m(r0)