case study 8
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Case14.4EditedAnswerKeyGuide.docxCase 14.4: Continental Trucking
Norm wants to develop a method for determining when preventive maintenance is needed. He believes that fuel consumption may be a good indicator of when trucks should be repaired. He also believes that fuel consumption is influenced by the weight of the truck and head winds. Norm has collected data on the miles per gallon for trucking with various haul weights traveling from East-West and from West-East. Norm should use this information to determine whether haul weight can be used to predict miles per gallon. If this can be done, the model can be used as a control to determine when a truck needs to be tuned up. Because head winds influence miles per gallon, two models are developed--one for the East-West haul and one for the West-East haul. The output using Excel regression analysis tool in the Data Analysis Toolpak should produce a result with values in the table below.
East-West Haul
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Regression Statistics |
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Multiple R |
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R Square |
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Adjusted R Square |
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Standard Error |
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Observations |
9 |
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ANOVA |
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df |
SS |
MS |
F |
Significance F |
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Regression |
1 |
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Residual |
7 |
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Total |
8 |
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Coefficients |
Standard Error |
t Stat |
P-value |
Lower 95% |
Upper 95% |
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Intercept |
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Haul Weight |
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West-East Haul |
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Regression Statistics |
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Multiple R |
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R Square |
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Adjusted R Square |
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Standard Error |
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Observations |
10 |
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ANOVA |
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df |
SS |
MS |
F |
Significance F |
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Regression |
1 |
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Residual |
8 |
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Total |
9 |
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Coefficients |
Standard Error |
t Stat |
P-value |
Lower 95% |
Upper 95% |
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Intercept |
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Haul Weight |
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Evaluate each model for statistical significance (see the Significance F which are the p-values for the test of the overall model's significance). Also assess the value of the R-square values. What does a test of the slope coefficient for either model reveal? Comment on the sample size, and what other possible steps can be taken to improve the model (for example transforming the data might help). Are there possible other variables that can be used? Write your report accordingly.
