Graphing of Scatter figure and Least square lines.
In a random sample of eight military contracts involving cost overruns, following information was obtained. X = bid price of the contract (in millions of dollars) and y = cost of overrun (expressed as a percent of the bid price).
|
x
|
6
|
10
|
3
|
5
|
9
|
18
|
16
|
21
|
|
y
|
31
|
25
|
39
|
35
|
29
|
12
|
17
|
8
|
1. Draw the scatter diagram for this data.
2. Find out the slope, b, and the intercept, a, for the least-squares line. Write the equation of the least squares line.
3. Diagram the least-squares line on your scatter diagram.
If an overrun contract was bid at 12 million dollars, what does the least-squares line predict for the cost of overrun (as a percent of bid price)?