A cost estimator for a construction company has collected the data found in the source file...
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A cost estimator for a construction company has collected thedata found in the source file Estimation.xlsx describing the totalcost (Y) of 97 difference projects and the following 3 independentvariables thought to exert relevant influence on the total cost:total units of work required (X1), contracted units of work per day(X2), and city/location of work (X3). The cost estimator would liketo develop a regression model to predict the total cost of aproject as a function of these 3 independent variables.
b. Suppose the estimator wants to use the total units of workrequired (X1), contracted units of work per day (X2), andcity/location of work (X3) as the independent variables to predicttotal cost. What should be the regression function between Y andX1, X2, and X3? What is the adjusted R-squared value of this model?What conclusions can you make? (Note that X3 is adummy variable. You should process it into different categories asI showed you in the class lecture. You should expand X3 intoLocation1, Location 2, …. Location 5 to differentiate the sixlocations.)
A cost estimator for a construction company has collected thedata found in the source file Estimation.xlsx describing the totalcost (Y) of 97 difference projects and the following 3 independentvariables thought to exert relevant influence on the total cost:total units of work required (X1), contracted units of work per day(X2), and city/location of work (X3). The cost estimator would liketo develop a regression model to predict the total cost of aproject as a function of these 3 independent variables.
b. Suppose the estimator wants to use the total units of workrequired (X1), contracted units of work per day (X2), andcity/location of work (X3) as the independent variables to predicttotal cost. What should be the regression function between Y andX1, X2, and X3? What is the adjusted R-squared value of this model?What conclusions can you make? (Note that X3 is adummy variable. You should process it into different categories asI showed you in the class lecture. You should expand X3 intoLocation1, Location 2, …. Location 5 to differentiate the sixlocations.)
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