SIMPLE LINEAR REGRESSION EXAMPLE

Butler’s Trucking Company is an independent trucking Company in southern California. A major portion of Butler’s business involves deliveries throughout its local area. To develop better work schedules, the managers want to estimate the total daily travel time for their drivers. Initially the managers believed that the total daily travel time would be closely related to the number of miles traveled in making the daily deliveries. A simple random sample of 10 driving assignments is provided in Table 1. Use Excel to make a scatter diagram of these deliveries (to verify that a linear relationship does exist) and develop a regression equation expressing this relationship.

Table 1 Driving Assignment X1=Miles Traveled Y=Travel Time (hrs.) 1 100 9.3 2 50 4.8 3 100 8.9 4 100 6.5 5 50 4.2 6 80 6.2 7 75 7.4 8 65 6.0 9 90 7.6 10 90 6.1

Excel Instructions for Drawing a Scatter Plot
1. Enter the above information in the Excel spreadsheet as shown in Figure 1 below.
2. Click on Insert on the toolbar and then click on the Chart tab. The Chart Wizard will appear. In step 1 on select the XY (scatter) chart type (Figure 2), then click next.
3. Your numerical data is contained in cells A2 through B11. So in step two enter your data range as shown in Figure 3, and click next.
4. In steps 3 you can give your chart a title and label your axes. In step 4 specify where you want the chart to be placed. The finished chart is shown in Figure 4.
5. After verifying that a linear trend does exist, determine the least squared regression