Instructions for testing any hypothesis:

1. State the null and alternative hypotheses.
2. What statistical test would you use?
3. Perform an appropriate statistical test on data provided.
4. What managerial decision(s) would you recommend?

1. (23 Points) Delma Trucking Company, located in Mesa Arizona makes deliveries in several Southern states. The operations manager is currently studying the relationship between the distance a shipment must travel and the length of time, in hours, it takes the shipment to arrive at its destination. The following table shows the previous distance and the shipping times of 12 randomly selected deliveries.

Manually complete the following parts:

1. Identify your dependent and independent variables. Explain it.
2. Find the correlation between the shipping time and traveling distance.
3. Is there any statistically significance correlation between these two variables at α = 0.10.
4. What is the r ² for your data? How would you use it?
5. Find the linear regression equation for this data. Interpret the regression coefficients (b ₀ and b ₁ ).
6. Do the data provide sufficient evidence at the 0.05 level to indicate that the two variables are related (test the β1)? What is the p value for your test?
7. Create your own ANOVA table.
8. What is the expected traveling time of a 645 miles shipment?
9. Use SPSS and Microsoft Excel to verify (compare) your answer for previous parts.

2. (17 Points) A mortgage division of a large local bank is studying its recent loans. Of particular interest is how such factors as the value of the home (in thousands of dollars), education level ( number of years) of the household, age of the head of household, current monthly mortgage payment (in dollars), and gender of head of household (male = 0, female =1) relate to annual family income. The relevant data from randomly selected 35 recently finalized loans are posted in our course page (Excel File for Assignment #6)

Complete an SPSS "forward" method Multiple Regression model and select the Regression options to create an appropriate computer printout. Submit YOUR OWN SPSS printout with your answer(s) to the following questions:

a. Write the optimal model (equation) to estimate a customer’s household family income. How did you select your model? You may round the model values to cents (3 decimal places). Assume α=5%.

b. What proportion (or percent) of annual household income is "explained" by the variables in the model?

c. Using your optimal model from part (a); what is the point estimate for the annual household income of a 55 years old man with a house value of $212,500, 14 years of education and $1,125.00 monthly mortgage? (Round your answer to nearest dollar)

d. What is the 95% interval estimation for the annual household income of the customer of Question (c)?

e. Looking again at your selected optimal model, is there any indication of gender-disparity in the annual household income? What about age? Explain briefly.

f. There is a 95% probability that the predicted annual household income of the family identified in (c) will be AT LEAST what value?

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Solution: The downloadable solution consists of 10 pages, 952 words and 25 charts.
Deliverable: Word Document