Running Head: QUANTITATIVE DECISION MAKING 1

Quantitative Decision Making

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QUANTITATIVE DECISION MAKING 2

Quantitative Decision Making

1).

The relationship among SST, SSR and SSE is as follows:

SST = SSR + SSE

Now incorporating the given values:

400 = SSR + 100

SSR = 400 – 100

SSR = 300

The standard error of estimate is 300 and this shows the average distance which is between the

observed values from the final regression line[ CITATION Bar12 \l 1033 ]. It shows error in

forecasting or room for error.

2).

Coefficient of Determination = R2 = SSR/SST = 1- SSE/SST

R2 = 1 – (100/400)
QUANTITATIVE DECISION MAKING 3

R2 = 0.75 or 75%

The R square is 75% and this means that the percentage variation or percentage change in the

dependent variable Y as a result of independent variable X is 75%. In other words, it tells us

about the proportion of the variance which is predictable from the independent variable.

3).

Correlation Coefficient = SQRT (R2)

R = SQRT (0.75)

R = 0.866 or 86.6%

The correlation coefficient shows us the relationship between two values and it has a value of

between -1 and +1[ CITATION Bod09 \l 1033 ]. The above correlation of 0.866 shows that the

relationship between X and Y is on the stronger side and this relationship is positive.

References
QUANTITATIVE DECISION MAKING 4

Barde. (2012). "What to use to express the variability of data: Standard deviation or standard

error of mean?". Perspect. Clin. Res.

Boddy, R. (2009). Statistical methods in practice: for scientists and technologists. Chichester,

U.K.: Wiley.