1. A sales manager has collected the following data on annual sales (
y
in $1000s) and years of
experience (
x
)
.
x
y
1
80
3
97
4
92
4
102
6
103
8
111
10
119
10
123
11
117
13
136
with summary information as following:
°
x
= 7
;
s
x
= 3
:
97
;
°
y
= 108
;
s
y
= 16
:
47
;
r
= 0
:
9646
(a) Develop an estimated regression equation that can be used to predict annual sales given
years of experience.
(b) John has two years of more experience than Sarah, do you think John°s annual sales will
be higher than Sarah°s annual sales? If yes, higher by what amount?
(c) A new hire has 20 years of experience, do you think you can predict his annual sales
through the linear regression model developed in (a)?
(d) At 5% level of signi±cance, do you think there is a positive linear relationship between
x
and
y
?
(e) Predict annual sales for a salesperson with 9 years of experience.
(f) Give a 95% interval estimate of average annual sales for people with 9 years of experience.
(g) Anthony is found to have 9 years of experience, give a 95% interval estimate of Anthony°s
annual sales.
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 Spring '09
 AnthonyChan
 Statistics, Forecasting, Linear Regression, Regression Analysis, Errors and residuals in statistics, sales manager

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