UCCB 3133, UCCG 3133 Business Analytics

(June 2023)

UNIVERSITI TUNKU ABDUL RAHMAN

FACULTY OF INFORMATION COMMUNICATIONS AND TECHNOLOGY
ACADEMIC YEAR 2023

UCCB 3133, UCCG 3133 - BUSINESS ANALYTICS

Tutorial 3 (Week 4 - Multi Linear Regression)

Activity 1 : (( without using Excel ))

Five observations taken for two variables follow.

a. Develop a scatter diagram with x on the horizontal axis.

b. What does the scatter diagram developed in part a indicate about the relationship
between the two variables?

c. Compute and interpret the sample covariance.

d. Compute and interpret the sample correlation coefficient.

Activity/ Question 2:

A recent 10-year study conducted by a research team at the Great Falls Medical School was
conducted to assess how age, systolic blood pressure, and smoking relate to the risk of
strokes. Assume that the following data are from a portion of this study. Risk is interpreted
as the probability (times 100) that the patient will have a stroke over the next 10-year period.
For the smoking variable, define a dummy variable with 1 indicating a smoker and 0
indicating a nonsmoker.

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*. Develop a scatter chart based on data shown in the figure above.

* From the scatter chart from part (i) above, explain the relationship between age of a
bus and the annual maintenance cost.

a. Develop an estimated multiple regression equation that relates risk of a stroke to the
person’s age, systolic blood pressure, and whether the person is a smoker.

b. Is smoking a significant factor in the risk of a stroke? Explain. Use a 0.05 level of
significance.

c. What is the probability of a stroke over the next 10 years for Art Speen, a 68-yearold
smoker who has a systolic blood pressure of 175? What action might the physician
recommend for this patient?

d. An insurance company will only sell its Select policy to people for whom the probability
of a stroke in the next 10 years is less than 0.01. If a smoker with a systolic
blood pressure of 230 applies for a Select policy, under what condition will the
company sell him the policy if it adheres to this standard?

e. What other factors could be included in the model as independent variables?

Activity/Question 3: ((Datafile = Absent ))

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A sociologist was hired by a large city hospital to investigate the relationship between the
number of unauthorized days that employees are absent per year and the distance (miles)
between home and work for the employees. A sample of 10 employees was chosen, and
the following data were collected.

a. Develop a scatter chart for these data. Does a linear relationship appear
reasonable? Explain.

b. Use the data to develop an estimated regression equation that could be used to
predict the number of days absent given the distance to work. What is the estimated
regression model?

c. What is the 99 percent confidence interval for the regression parameter b1? Based
on this interval, what conclusion can you make about the hypotheses that the
regression parameter b1 is equal to zero?

d. What is the 99 percent confidence interval for the regression parameter b0? Based
on this interval, what conclusion can you make about the hypotheses that the
regression parameter b0 is equal to zero?

e. How much of the variation in the sample values of number of days absent does the
model you estimated in part b explain?

Activity/ Question 4: ((Datafile = MktHrsPts))

A marketing professor at Givens College is interested in the relationship between hours

spent studying and total points earned in a course. Data collected on 156 students who
took the course last semester are provided in the file MktHrsPts.

a. Develop a scatter chart for these data. What does the scatter chart indicate about the
relationship between total points earned and hours spent studying?

b. Develop an estimated regression equation showing how total points earned is related
to hours spent studying. What is the estimated regression model?

c. Test whether each of the regression parameters b0 and b1 is equal to zero at a 0.01

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 UCCB 3133, UCCG 3133 Business Analytics
(June 2023)
level of significance. What are the correct interpretations of the estimated regression
parameters? Are these interpretations reasonable?

d. How much of the variation in the sample values of total point earned does the model
you estimated in part b explain?

e. Mark Sweeney spent 95 hours studying. Use the regression model you estimated in
part b to predict the total points Mark earned.

Activity/Question 5 :

Figure 1b

(a) (i) Develop a scatter chart based on data shown in Figure 1a above.
(5 marks)
Answer ( Q1 (a)(i) ) :
>> 5 marks for the scatter chart, to a maximum of 5 marks.

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(June 2023)

(ii) From the scatter chart from part (i) above, explain the relationship
between age of a bus and the annual maintenance cost. (4 marks)

(b) Formulate the estimated regression model that could be used to predict the
annual maintenance cost given the age of the bus. (5 marks)

(c) Predict the annual maintenance cost to be, for a 3.5-year-old bus. (5 marks)

(d) (i) Based on Figure 1c below, test whether each of the regression
parameters β0 and β1 is equal to zero at a 0.01 level of significance.
(3 marks)

(ii) Interpret the estimated regression parameters (i.e. describe the

relationship between line speed and number of defective parts found).
(3 marks)
[Total : 25 marks]

Figure 1c
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 UCCB 3133, UCCG 3133 Business Analytics
(June 2023)