Question

The owner of a moving company typically has his most experienced manager predict the total number of labor hours that will be required to complete an upcoming move. This approach has proved useful in the past, but the owner has the business objective of developing a more accurate method of predicting labor hours. In a preliminary effort to provide a more accurate method, the owner has decided to use the number of cubic feet moved and the number of pieces of large furniture as the independent variables and has collected data for 36 moves in which the origin and destination were within the borough of Manhattan in New York City and the travel time was an insignificant portion of the hours worked. If the sum of squares Y is 2,685.9 and the sum of squares error is 123.97.

Required:
What proportion of variation in labor hours is explained by the number of cubic feet moved?

Answer 1

0.9538

Explanation:

The computation of the proportion of variation in labor hours is explained by the number of cubic feet moved is shown below:

Here the R^2 coefficient of determination, would be determined and applied the same

R^2 = 1 - SSE ÷ SST

= 1 - 123.97 ÷ 2685.9

= 0.9538