Answer to Question #277032 in Management for LIZIE

Question

A non-governmental organization has offices located in six regions. Given below is data on staffing and running costs in each of the regions

Number of staff

10

8

14

12

11

9

Running cost (‘000)

102

93

143

121

118

99

 

i)                            Determine the simple linear regression equation for this data                                        (8 marks)

 

 

ii)                          Using the equation in (i) estimate the cost of running an office with only 5 employees. (2 marks)

iii)      Compute the coefficient of correlation and coefficient of determination and interpret their values.                                                                                                                 (2 marks)

Answer 1

 

Y=a+bX

Therefore, Y=22914.3+ 8414.3X

b) Coefficient of correlation

c) Coefficient of determination

r²= 0.368²

=0.135

= 13.65%

This means that 13.5% of the data fits in the regression model.