A sales manager has collected the following data on annual sales ( y ) and years of experience ( x ) . Sales person Years of Experience ( x ) Annual Sales (K’000) ( y ) 1 80 3 97 4 92 4 102 6 103 6 8...

A sales manager has collected the following data on annual sales (
^y
) and years of experience (
^x
)

.

Sales person                Years of Experience
(
^x
)                                 Annual Sales (K’000)
(
^y
)

• 1 80


• 3 97


• 4 92


• 4                                    102


• 6 103 6                                               8                                                                    111


• 10                                                 119


• 10 123


• 11 117


• 13               136

• Draw a scatter diagram. Does a linear relationship between
  x
  and
  y
  seem appropriate


• Estimate the simple linear regression line. Interpret the parameters in the model (c) What practical use could be made of this equation?
  
  


• Use the estimated regression equation to predict annual sales for a sales man with 9 years

of experience

• At the 5% level of significance would you conclude that there is a linear relationship between
  x
  and
  y
  ?


• Construct a 95% confidence interval for the slope parameterβ₁.


• Find the correlation coefficient (h)Find the coefficient of determination and interpret the value.


• Give the ANOVA table

Use the ANOVA table to test for a significant linear relationship between years of experience and annual sales