Question: A local tire dealer wants to predict the number of tires sold each month. He believes that the number of tires sold is a linear function of the amount of money invested in advertising. He randomly selects 6 months of data consisting of tire sales (in thousands of tires) and advertising expenditures (in thousands of dollars). Based on the data set with 6 observations, the simple linear regression model yielded the following results. (X is advertising expenditure in thousand dollars and Y is tires sold in thousands): ∑X =24; ∑Y =42; ∑X2 = 124; ∑Y2 = 338; ∑XY = 196
Find the Intercept and slope and Write the Regression Equation. Also predict the amount of tires (in thousand tires) sold when money invested in advertising is 5 thousand dollars. Calculate the correlation coefficient, coefficient of determination. Check whether there is a relation between correlation coefficient and coefficient of determination. Calculate SSE and MSE and standard error of the slope coefficient.