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Salespersons A B C D E F G H I
Intelligence test 50 60 50 60 80 50 80 40 70
score
Monthly Sales 30 60 40 50 60 30 70 50 60
(i) Obtain the regression equation of sales based on intelligence test scores
of the salespersons.
(ii) Two salespersons ‘J’ and ‘K’ were absent; their intelligence scores
obtained later was 65 and 80 respectively. What would be their expected
monthly sales?
Answer:
Regression Statistics
Multiple R 0.75
R Square 0.5625
Adjusted R
Square 0.5
Standard
Error 10
Observations 9
Standard
Coefficients Error t Stat P-value
Intercept 5 15.36590743 0.325396 0.754392
X Variable
1 0.75 0.25 3 0.019942
1
Regression equation is
Q8. Using the index (with 1985 = 100) on housing price starts in India per year 8M
from 1986 to 1997 given in the table below, forecast the index for 1998 using
the three- year and five years moving average. Which estimate is better and
why?
Answer:
3 year- 5 year-
Squared 5 squared
Actual 3 year Error Error year Error error
1986 116
1987 122
1988 121
1989 121 119.6667 1.333333 1.777777778
1990 111 121.3333 -10.3333 106.7777778
1991 97 117.6667 -20.6667 427.1111111 118.2 -21.2 449.44
1992 113 109.6667 3.333333 11.11111111 114.4 -1.4 1.96
1993 125 107 18 324 112.6 12.4 153.76
1994 146 111.6667 34.33333 1178.777778 113.4 32.6 1062.76
1995 142 128 14 196 118.4 23.6 556.96
2
1996 156 137.6667 18.33333 336.1111111 124.6 31.4 985.96
1997 162 148 14 196 136.4 25.6 655.36
-
1998 153.3333 -153.333 23511.11111 146.2 146.2 21374.44
Three years moving average estimate is better. Because, the RMSE value of
3 years moving average is lower than the RMSE value of 5 years moving
average.