Question

A regression analysis was performed to determine the relationship between the costs of a product (y), the time to make the product (x1 ), the number of different materials used (x2), and the amount spent on marketing the product (x3). The estimated regression equation is ŷ = 83- 2x1+ 6x2 + 1.1x3.

What is the estimated cost if the time to make the product is 5 hours, the number of different materials used is 4, and the amount spent on marketing is $100?

a. 83
b. 213
c. 185.4
d. 205.

Answer 1

D) 205

Explanation:

Given : Cost = 83 - 2 (time taken) + 6 (materials) + 1.1 (marketing cost)

Relationship Equation : y = 83- 2x1+ 6x2 + 1.1x3

Given, time (x1) = 5 , materials (x2) = 4 , marketing cost (x3) = 100

So, putting values, Cost : y = 83 - 2 (5) + 6 (4) + 1.1 (100)

= 83 - 10 + 24 + 110 = 207

The closest to this calculated estimated figure ie 207, is 205.