Liangcungco, Carla C.

A-237 Module 11 Assignment

1. The Tire Rank, an online distributor of tires and wheels, conducts extensive testing to provide customers
with products that are right for their vehicle, driving style, and driving conditions. In addition, The Tire Rack
maintains an independent consumer survey to help drivers help each other by sharing their long-term tire
experiences (The Tire Rack website, August 1, 2016).  The survey use 1 to 10 rating scale with 10 as the highest
rating for 18 high-performance all-season tires. The tread wear variable rates quickness of wear based on the
driver’s expectations; the dry traction variable rates the grip of a tire on a dry road; the steering variable rates
the tire’s steering responses; and the buy again variable rates the driver’s desire to purchase the same tire
again.  These data were analyzed using multiple regression analysis, which results of which are shown on the
table below.  Interpret the results. 

Regression Statistics

Multiple R 0.96956582

R Square 0.94005788

Adjusted R Square 0.926225083

Standard Error 0.57191668

Observations 10

ANOVA

df SS MS F Significance F

Regression 3 66.68549411 22.2285 67.95862652 3.36066E-08

Residual 13 4.252152953 0.327089

Total 16 70.93764706

Coefficients Standard Error t Stat P-value

Intercept -10.3397728 2.126333551 -4.86272 0.000310027

Tread wear 1.200056035 0.146227731 8.206761 1.68927E-06

Dry traction 0.621872989 0.504775274 1.23198 0.239775859

Steering 0.325237913 0.424731891 0.765749 0.457504454

If significance F-value is less than 0.05 level of significance, reject the null hypothesis. Otherwise, do not reject
the null hypothesis.

As shown on the Anova table, reject the null hypothesis, significance F-value of 0.00000003 is less than
0.05 level of significance, which means at least one of the independent variables has significant positive linear
relationship with the vehicle, driving style, and driving conditions. This also shows that the null hypothesis of no
significant positive linear between independent variables namely thread wear, dry traction, steering and
vehicle, driving style, driving conditions is rejected.

If p-value is less than 0.05 level of significance, it means that a particular independent variable has significant
linear relationship with the dependent variable.

In particular, the tread wear has a significant positive linear relationship with the vehicle, driving style
and driving conditions as its p-value of 0.000001 is less than 0.05 level of significance; while dry traction has p
value of 0.239775859 and steering, on the other hand, has a p value of 0.457504454 which the two are greater
than 0.05 level of significance.

Multiple Linear Regression Equation Model = Y = -10.3397728 + 1.200056035X 1 + 0.621872989X2 +

0.325237913X3

The model suggests that the value of vehicle, driving style and driving conditions is -10.3397728 if all
independent variables namely tread wear, dry traction, and steering are zero. Aside from that, it shows that
1.200056035 is the change in tread wear variable rates quickness of wear based on the driver’s expectations
when other variables are held constant; 0.621872989 is the change in dry traction variable rates the grip of a
tire on a dry road when other variables are held constant; and 0.325237913 is every change in the steering
variable rates the tire’s steering responses when other variables are held constant.

The tread wear, dry action, steering have a very high positive linear relationship with extensive testing (vehicle,
driving style, driving conditions) on its multiple r-value of 0.96956582. In addition, the multiple r2 suggests that
94.01% of the variation in the extensive testing can be explained by its interactions with the tread wear, dry
traction, and steering, and that 5.99% were caused by unexplained factors nor factors which were not included.

Based on the results with car, driving style, and driving conditions, independent variables showed a very strong
positive relationship, as seen in the data. Tire Rank, on the other hand, need an improvement so that they can
increase tread wear, dry traction, and steering if they want to attract their target consumers to buy from them.

2. In testing 10 sedans, an automobile publication rated each on 13 different characteristics, including ride,
handling, and driver comfort. Each vehicle also received an overall rating.  The data were recorded, and
multiple regression analysis was performed on it.  The table below shows the results of the analysis.  Interpret
the result.  What is the estimated overall rating for a vehicle that scores 6 on ride, 9 on handling, and 7 on
driver comfort?

Regression Statistics

Multiple R 0.818288937
 R Square 0.669596785

Adjusted R Square 0.504395177

Standard Error 3.099875295

Observations 10

ANOVA

df SS MS F Significance F

Regression 3 116.8446389 38.94821 4.05320986 0.068370032

Residual 6 57.65536105 9.609227

Total 9 174.5

Coefficients Standard Error t Stat P-value

Intercept 46.74070022 15.53545447 3.008647 0.023741891

Ride 3.463894967 1.157780465 2.991841 0.024262446

Handling 3.915754923 1.30102027 3.009757 0.023707941

Driver comfort -1.90809628 1.294945434 1.4735 0.191049531

As shown on the table, do not reject the hypothesis, significance F-value of 0.068370032 is greater
than .05 level of significance. This indicates that none of the independent variables known as ride, handling,
and driver comfort has significant positive linear relationship with the received overall rating of the vehicle.

In particular, the ride and handling have significant positive linear relationship with the overall rating of
the vehicle as their p- value of 0.024262446 and 0.023707941, respectively, is less than 0.05 level of
significance. It is observed that if there is an increase on the number of ratings of the variables ride and
handling, the overall rating of the vehicle is also affected.

Multiple Linear Regression Equation Model = Y = 46.74070022 + 3.463894967X 1 + 3.915754923X2 +

-1.90809628X3

This model suggests that the value of overall rating is 46.74070022 if all independent variables of ride,
handling, and driver comfort are zero. Also, it shows that 3.463894967 is the change in every unit on overall
rating in ride when other variables are held constant; 3.915754923 is the change in every unit on overall rating
in handling when other variables are held constant; and -1.90809628 is the change in every unit on overall
rating in driver comfort when other variables are held constant.

Y= 46.74070022 +3.463894967(6) +3.915754923(9) +-1.90809628 (7)

Y= 46.74070022 + 20.783369802 + 35.241794307 +-13.35667396

Y= 89.409190369 ≈ 89.41

Based on the multiple r-value of 0.818288937; the ride, handling, and driver comfort have high positive
linear relationship with the 10 sedans. Likewise, its multiple r2 value indicates that 66.96% of the variation in
the overall rating can be caused by its interactions with the ride, handling, and driver comfort and the
remaining 33.04% are caused by other factors which were not covered nor being influenced in this study.

The ride, handling, driver comfort have a high positive linear relationship with the ten sedans on its
multiple r-value of 0.818288937. In addition, the multiple r2 suggests that 66.96% of the variation in the overall
rating can be explained by its interactions with the ride, handling, driver comfort and the remaining 33.04%
were caused by unexplained factors nor factors which were not included.

Based on the results, factors of ride, handling, and driver comfort are contained and tested in the
overall ratings of the vehicle being marketed. If they want to increase their profits, they should guarantee their
customers that they will surely be satisfied in their offer.