Event : Case Analysis on Module 6 (Only Q6 and Q7) Topic : Correlation and Regression Date : 23rd Oct 2012

Date of Submission: 27th Oct 2012

Q.1 Glaxosmithkline India (GSK) is a subsidiary of britian based major pharmaceutical companyglaxomithkline plc. The company was formally known as glaxo before its merger with French pharmaceutical company smithkline beecham. In 2006, the pharmaceutical business accounted for nearly 92% of GSKs business. The below table exhibits income (in million Rs) and expenses (in million Rs) of glaxosmithkline pharmaceutical ltd from 1989-1990 to 2006-2007(except 1993-1994) INCOME ( RS IN EXPENSES ( RS IN "MILLION") MILLION) 3566.4 3441.8 4232 4241.5 5024.8 5052.3 5650.8 5666.3 8076.4 7641.2 11478.9 9678.5 7315.3 6881.9 7883.5 7695.7 9171.8 8185.5 9482.5 8789.8 9958.2 9571.6 12607.8 12015.7 12390.9 11513.6 12974.8 11297.6 16702.4 13403.4 18901.2 13874.9 19807.5 14578.3

YEAR 1989-1990 1990-91 1991-92 1992-93 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07

1. Comment on the correlation coefficient between Income and Expenses. 2. Develop the Simple Linear Regression model. 3. Calculate the coefficient of determination, standard error of the estimate, and state its interpretations. 4. Forecast the expenses, if the income is 25000.

5. Perform the t test for the slope of the regression line. 6. Test the overall model. Q-2 Ranbaxy laboratories ltd, incorporated in 1961, is one of Indias largest pharmaceutical companies. The below table exhibits the sales volume and advertisement expenditure (Rs in million) of Ranbaxy laboratories ltd from 1989-1990 to 2006-2007.

YEAR 1989-1990 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07

ADVERTISEMENT SALES ( RS IN MILLION) EXPENDITURE(RS IN MILLION) 2064.5 30.4 2587.8 51 3396.9 59.1 4622.2 79.5 5944.7 50.8 7139.2 98.2 8940.1 112.7 10427.3 141.6 12421.3 224.8 11296.5 169.8 16670.3 409.3 17757.1 560.2 19597.8 863.5 31317.6 1306.5 38889.8 1822.6 38658.7 2017.2 32840.3 2008.1 35991.5 1487.1

1. Develop the Regression model for the above variables. 2. Calculate the coefficient of determination, standard error of the estimate, and state its interpretations. 3. Predict sales when advertisement is 3000 million Rs. 4. Perform the t test for the slope of the regression line. 5. Test the overall model.

Q-3 A large super market has adopted a new strategy to increase its sales. It has adopted a few customer friendly policies and is using video clips of 15 minutes to propagate the new policies. The following table provides data about the no. of video clips shown in a randomly selected day and the sales turnover of the super market in the corresponding day.

DAYS 1 2 3 4 5 6 7 8 9 10 11 12

NO. OF VIDEO CILPS SHOWN 25 25 25 35 35 35 40 40 40 50 50 50

SALES(RS IN THOUSANDS) 150 210 140 180 230 270 310 330 300 270 310 340

1. 2. 3. 4. 5.

Develop a regression model to predict sales from the no. of the video clips shown. Calculate the coefficient of the determination and interpret it. Predict the sales when the number of video clips shown are 60. Perform the t test for the slope of the regression line. Test the overall model.

Q-4 The HR manager of a multinational company wants to determine the relationship between experience & income of employees. The following data are collected from 14 randomly selected employees.

EMPLOYEES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 1. 2. 3. 4. 5.

EXPERIENCE( in YEARS) 2 4 5 6 7 8 9 10 12 13 14 15 16 18

INCOME ( IN 000 RS.) 30 40 45 35 50 60 70 65 60 55 75 80 85 75

Develop a regression model to predict income based on the years of experience. Calculate the coefficient of the determination and interpret it. Predict the income of an employee who has 22yrs of experience. Perform the t test for the slope of the regression line. Test the overall model.

Q-5 A dealer of a motor cycle company believes that there is a positive relationship between the no.of sales people employed and the increase in the sales of bikes. Data for 14 randomly selected weeks are given in the following table:

WEEKS 1 2 3 4 5 6 7 8 9 10 11 12 13 14

NO. OF SALES PEOPLE EMPLOYED SALES(IN UNITS) 17 34 14 39 25 60 40 80 15 38 18 50 13 35 11 25 27 51 12 29 38 89 36 85 41 90 28 63

1. 2. 3. 4. 5.

Develop a regression model to predict sales from the no. of sales people employed. Calculate the coefficient of the determination and interpret it. Predict sales when no. of sales people employed are 100. Perform the t test for the slope of the regression line. Test the overall model.

Q-6 The municipal corporation of a newly formed capital city is planning to launch a new water supply scheme for the city.For this, the municipal corporation has considered past data on water consumption in 16 randomly selected weeks of the previous summer and the average temperature in the corresponding week. On the basis of the data, the corporation wants to estimate the water requirement for the current year. Data are given as below: WATER CONMSUMPTION(IN MILLION GALLONS) 150 160 168 145 140 142 155 165 167 175 185 180 170 165 170 173

WEEKS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

TEMPERATURE(IN F.) 37 38 39 35 34 33 37 40 41 42 44 42 40 38 42 44

1. Develop a regression model to predict water consumption from the temperature of the corresponding week. 2. Calculate the coefficient of the determination and interpret it. 3. Predict the water consumption when temperature is 47 f. 4. T test for the slope of the regression line. 5. Test the overall model. 6. Statistical inferences about the correlation coefficient of the regression model.

Q-7 A company is a concerned about the high rates of the absentism among its employees. It organize a training program to boost the morale of its employees.The following table gives the no.of days that sixteen randomly selected employees have received training , and the no.of days they have availed leave.

EMPLOYEES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

TRAINING DAYS LEAVE 12 14 16 13 11 10 15 17 18 19 17 15 13 15 17 12

20 18 16 22 18 19 14 12 10 9 11 16 19 17 15 21

1. 2. 3. 4. 5.

Develop a regression model to predict leave based on training days. Calculate the coefficient of the determination and state its interpretation. Predict the leaves when training days are 25. Perform the t test for the slope of the regression line. Test the overall model.