Misty is a logistics analyst at Bear Industries, she recently built a single-var

Question

Misty is a logistics analyst at Bear Industries, she recently built a single-variable regression model using the previous month's product demand to predict next month's demand for milling machine repair parts. The Excel output from the model that she created is shown below. Based on this output and the procedure presented in class, the model F test and the t-test for the previous period's demand indicate that the model and independent variable are significant. However, the intercept is not significant. So, this model should not be used.

True or False

SUMMARY OUTPUT Regression Statistics MultipleR R Square Adjusted R Square Standard Error Observations 0.866587279 0.750973512 0.739654126 2.828839714 24 ANOVA Significance F 1530.9069825 530.9069825 66.34015874.37383E-08 MS Regression Residual Total 22 176.0513508 8.002334129 23 706.958333:3 P-value Lower 95% Upper 95% Coefficients Standard Errort Stat 9.3701645622.156241463 4.345600771 0.000259374 4.898393465 13.84193566 Intercept Previous month's demand 0.000999028 0.000122653 8.1451836 4.37383E-08 0.000744662 0.001253394

Explanation / Answer

False, if the t-test and f- test indicates that the model is correct, the model should be used. The problem of wron intercept can be easily rectified by using a error value.

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