Develop an equation to determine the correlation coefficient from a given data set.

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Use linear regression to develop a predictive model for demand for ironing board covers based on sales of irons.

Year——–Sales of Irons (000)—-Demand for Covers (000)
1—————8——————————-5
2—————7——————————-2
3————— 10——————————- 6
4————— 6——————————- 4

A) Develop the equation.
B) What is the coefficient of correlation for this data?
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Solution Preview

Please view the attachment below for a detailed solution.

The equation is: Demand for Covers = 0.554*Sales of Irons

The two are correlated by 0.714

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Here is the output from excel. Assume that demand for covers will …