The labor estimation group at Sturdy Electronics, a contract electronics manufacturer of printed circuit boards, wants to si

production costs to potential customers. They have identified the primary drivers for production time (and thus production
electronic parts that can be machine installed and the number of parts that must be manually installed. Accordingly, they
regression model to predict production time, measured as minutes per board, using a random sample of 25 recent produc
shown in the accompanying table (Quotations)

a.What is the sample regression equation?

b.Predict production time for a circuit board with 475 machine-installed components and 16 manually-installed componen

c. What proportion of the sample variability in production time is explained by the two explanatory variables?

d. At the 5% significance level, are the explanatory variables jointly significant? Are they individually significant?

Answer a

Regression is a functional relationship ebtween dependent and independent

variables in the current context Production time is dependent upon Machine
1 parts and Manual Parts\

It is an example of multiple regression as production time depends on more than

2 one variable

Since r square which is coefficient of determination is 0.853 which is much higher

3 than 0.7, it signifies that model is strong enough to be taken forward

Coefficient of determination (0.853) represents machine part and manual part

4 taken together are able to explain 85.3 percent of changes in Production Time

To test signifance of
independent
5 variables H0 = Machine Parts is insignificant B=0 p=0.003
 H1 = Machine Part is significant B=/ 0 LOS = 0.05

H0 = Manual Parts is insignificant B=0 p=0.00000

H1 = Manual Part is significant B=/ 0 LOS = 0.05

Interpretation of With every one unit increase in
Regression machine part production time
6 Coefficient increases by 0.0078 minutes
With every one unit increase in
manual part production time
increases by 0.6464 minutes
7 Regression Model Y = C + mx1 +mx2 …. + mxn
Production Time = 0.03568 + 0.00789(Machine Parts) + 0.64645(Manual Parts)
8
urer of printed circuit boards, wants to simplify the process it uses to quote
for production time (and thus production cost) as being the number of
be manually installed. Accordingly, they wish to develop a multiple
ng a random sample of 25 recent product quotations. A portion of the data is

Regression Equation

nts and 16 manually-installed components. Ans b C

Coeff Machine Parts

e two explanatory variables? Coeff Manual Parts

Production Time

e they individually significant? Ans c This is another way of asking for r square

So since value of r square is 85.3%, this m

variables explain 85.3% of the sample v

en dependent and independent

me is dependent upon Machine
Parts\

ction time depends on more than

tion is 0.853 which is much higher

enough to be taken forward

s machine part and manual part

nt of changes in Production Time

since p < LOS

Alternate hypothesis
is accepted
 Therefore Machine
parts are significant
variable
since p < LOS
Alternate hypothesis
is accepted
Therefore Manual
parts are significant
variable

Parts) + 0.64645(Manual Parts)

 0.0356812376427254
0.00789164027456095

0.646452340368227
14.1274478139508

ther way of asking for r square

ce value of r square is 85.3%, this means that the two explanatory

ables explain 85.3% of the sample variabiloty in production time
SUMMARY OUTPUT

Regression Statistics
Multiple R 0.9235616171
R Square 0.8529660605
Adjusted R Square 0.8395993388
Standard Error 1.3372219754
Observations 25

ANOVA
df SS MS F Significance F
Regression 2 228.214822544 114.10741127 63.81265916784 0.00000000069
Residual 22 39.3395774557 1.7881626116
Total 24 267.5544

Coefficients Standard Error t Stat P-value Lower 95%

Intercept 0.0356812376 1.35497685003 0.0263334666 0.97922877 -2.77436875927
Machine Parts 0.0078916403 0.00237068349 3.3288460132 0.00304614 0.00297514364
Manual Parts 0.6464523404 0.06869265333 9.4107929892 0.0000000036 0.50399249666
 Upper 95% Lower 95.0% Upper 95.0%
2.8457312346 -2.7743687593 2.8457312346
0.0128081369 0.0029751436 0.0128081369
0.7889121841 0.5039924967 0.7889121841
Productio Machine Manual
n Time Parts Parts
9.1 275 14
10.8 446 12
16.2 631 18
9.7 388 7
12.7 511 15
15.5 579 18
15.6 622 17
18.4 334 24
19.2 493 20
11.1 325 15
10.6 435 11
17.8 642 18
9.9 393 8
12.9 533 15
14.5 555 17
16.6 630 18
18.1 325 22
18.9 476 19
9.8 288 14
10.7 444 12
16.7 655 19
10.1 398 9
12.6 502 15
15.3 577 17
15.5 618 16