STATISTICS FOR MANAGERS
/in Posts /by adminThe chair of the accounting department wants to develop a regression model to
predict the grade point average in accounting for graduating accounting majors,
based on the students’ SAT score and whether the student received a grade of B
or higher in the introductory statistics course (0 = no and 1 = yes).
a. Explain the steps involved in developing a regression model for these data.
Be sure to indicate the particular models you need to evaluate and
compare.
b. Suppose the regression coefficient for the variable of whether the student
received a grade of B or higher in the introductory statistics course
is +0.30, how do you interpret this result?
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STATISTICS FOR MANAGERS
/in Posts /by adminLa Quinta Motor Inns developed a computer model to predict the profitability of
sites that are being considered as locations for new hotels. If the computer
model predicts large profits, La Quinta buys the proposed site and builds a new
hotel. If the computer model predicts small or moderate profits, La Quinta
chooses not to proceed. This decision-making procedure can be expressed in the
hypothesis-testing framework. The null hypothesis is that the site is not a
profitable location. The alternative hypothesis is that the site is a profitable
location.
a. Explain the risks associated with committing a Type I error in this case.
b. Explain the risks associated with committing a Type II error in this case.
c. Which type of error do you think the executives at La Quinta Motor Inns are
trying hard to avoid? Explain.
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