DR.S.TAMILSELVAN.

,
M.Com., M.Phil., MBA., Ph.D. (Commerce).,Ph.D. (Mgt)

DEPARTMENT OF ACCOUNTING AND FINANCE

S.A COLLEGE OF ARTS AND SCIENCES

DBA 7102
STATISTICS FOR MANAGEMENT
Regression
Analysis
➢ASSUMED MEAN METHOD
➢ARITHMETIC MEAN METHOD
ASSUMED MEAN
METHOD
 Regression Equations
Assumed Mean Method

Regression Equations X on Y X = a + bY

Regression Equations X on Y find out the Values of the two constants a and b,
𝜮X = Na + b𝜮Y ------------- 11
𝜮XY = a𝜮Y + b𝜮Y² ----------- 22

Regression Equations Y on X Y = a + bX

Regression Equations X on Y find out the Values of the two constants a and b,
𝜮𝐘 = Na + b𝜮𝐗 ------------- 11
𝜮XY = a𝜮𝐗 + b𝜮X² ----------- 22
Problem No : 1.
Find out the Regressions, X on Y and Y on X from the following data
X 25 30 35 40 45 50 55
Y 18 24 30 36 42 48 54
Solution :
X Y X² Y² XY
25 18 625 324 450
30 24 900 576 720
35 30 1,225 900 1,050
40 36 1,600 1,296 1,440
45 42 2,025 1,764 1,890
50 48 2,500 2,304 2,400
55 54 3,025 2,916 2,970
𝜮X = 280 𝜮Y = 252 𝜮X² = 11,900 𝜮Y² = 10,080 𝜮XY = 10,920
𝜮X = 280, 𝜮Y = 252, 𝜮X² = 11,900, 𝜮Y² = 10,080, 𝜮XY = 10,920
Regression Equations X on Y X = a + bY Substituting the value of b in equation (1)

Regression Equations X on Y find out the 280= 7a + 252(0.83)

Values of the two constants a and b 280 = 7a + 209.16
𝜮X = Na + b𝜮Y ------------- (1) 7a + 209.16 = 280
𝜮XY = a𝜮Y + b𝜮Y² ----------- (2) 7a = 280 – 209.16

280= 7a + 252b -------------(1) 7a = 70.84, a =70.84/7 = 10.12

𝟏𝟎𝟗𝟐𝟎 = 𝟐𝟓𝟐𝒂 + 10080b ----------- (2) a = 10.12

Multiplying equation (1) By 36, Hence,

10080 = 252a + 9072b ---------------- (3) X = a + bY
10920 = 252a + 10080b ---------------- (4) X = 10.12 + 0.83Y
Deducting equation (3) from (2)
1008b = 840
Therefore, b = 840/1008 = 0.83, b = 0.83
𝜮X = 280, 𝜮Y = 252, 𝜮X² = 11,900, 𝜮Y² = 10,080, 𝜮XY = 10,920
Regression Equations Y on X Y = a + bX Substituting the value of b in equation (1)

Regression Equations Y on X find out the 252= 7a + 280(1.2)

Values of the two constants a and b 252 = 7a + 336
𝜮𝐘 = Na + b𝜮𝐗 ------------- (1) 7a + 336 =252
𝜮XY = a𝜮𝐗 + b𝜮X² ----------- (2) 7a = 252 – 336

252= 7a + 280b -------------(1) 7a = - 84, a = - 84/7 = - 12

𝟏𝟎𝟗𝟐𝟎 = 𝟐𝟖𝟎𝒂 + 11900b ----------- (2) a = -12

Multiplying equation (1) By 40, Hence,

10080 = 280a + 11200b ---------------- (3) Y = a + bX
10920 = 280a + 11900b ---------------- (4) Y = -12 + 1.2Y
Deducting equation (4) from (3)
700b = 840
Therefore, b = 840/700 = 1.2 b = 1.2
 ARITHMETIC
MEAN METHOD
(a). Regression Equations X on Y,

ഥ = 𝒓 𝝈𝒙 𝐘 − 𝒀
ഥ ,= 𝝈𝒙 𝜮𝒙𝒚
𝐗−𝑿 𝒓 = 𝟐
𝝈𝒚 𝝈𝒚 𝜮𝒚

(b). Regression Equation Y on X,

ഥ = 𝒓 𝝈𝒚 𝐗 − 𝑿
ഥ ,= 𝝈𝒚 𝜮𝒙𝒚
𝐘−𝒀 𝒓 = 𝟐
𝝈𝒙 𝝈𝒙 𝜮𝒙
Problem : 2. Find out the regression equation X on Y on the X from following data

X 20 30 40 50 60 70 80
Y 21 35 45 53 70 77 84
 𝑿 𝐘 ഥ
𝒙= 𝐗 − 𝑿 ഥ
𝒚= 𝐘−𝒀 𝒙² 𝒚² 𝑥𝑦

𝒙= 𝐗 − 𝟓𝟎 𝐘 − 𝟓𝟓

20 21 -30 -34 900 1156 1020

30 35 20 -20 400 400 400

40 45 -10 -10 100 100 100

50 53 0 -2 0 4 0

60 70 10 15 100 225 150

70 77 20 22 400 484 440

80 84 30 29 900 841 870

350 385 2,800 3210 2980

𝜮𝑿 = 𝟑𝟓𝟎 𝜮𝐘 = 𝟑𝟖𝟓 𝜮𝒙² = 2,800 𝜮𝒚² = 3,210 𝜮𝒙𝒚= 2,980

ഥ = 𝜮X/N = 350/7 = 50, 𝒀

𝑿 ഥ = 𝜮𝐘 /N =385/7 = 55
 𝜮𝒙² = 2,800, 𝜮𝒚² = 3,210, 𝜮𝒙𝒚= 2,980

Regression Equations X on Y Regression Equations X on Y

𝝈𝒙 𝝈𝒙 𝜮𝒙𝒚 𝝈𝒙 𝝈𝒚 𝜮𝒙𝒚
ഥ
𝐗−𝑿 = 𝒓 ഥ ,
𝐘−𝒀 𝒓 = 𝟐 ഥ
𝐘−𝒀 = 𝒓 ഥ ,
𝐗−𝑿 𝒓 = 𝟐
𝝈𝒚 𝝈𝒚 𝜮𝒚 𝝈𝒚 𝝈𝒙 𝜮𝒙

𝝈𝒙 𝝈𝒚 𝜮𝒙𝒚 2,980
𝒓 = 2980/3210 = 0.93 𝒓 = = 2,800 = 1.06
𝝈𝒚 𝝈𝒙 𝜮𝒙𝟐 ,

Hence, (X – 50) = 0.93 (Y – 55) Hence, (X – 55) = 1.06 (Y – 50)

(X – 50) = 0.93 (Y – 55) (Y – 55) = 1.06X – 53

Y= 1.06X – 53 + 55

(X – 50) = 0.93Y – 51.15 Y = 2 + 1.06X

X = 0.93Y – 51.15 + 50
X = - 1.15 + 0.93Y
Problem : 3 Calculate the regression equations X on Y and Y on X from the following data.
X 8 7 10 9 6
Y 15 18 17 21 14
Calculate, (i) The value of Y for a given value of X as 21. (ii) The value of X when the value of Y is 30
X Y ഥ)
x = (X - 𝑿 ഥ)
y= (Y - 𝒀 𝒙𝟐 𝒚𝟐 𝒙𝒚
= (X – 8) = (Y – 17)
8 15 0 -2 0 4 0
7 18 -1 1 1 1 -1
10 17 2 0 4 0 0
9 21 1 4 1 16 4
6 14 -2 -3 4 9 6
𝜮𝑿 = 𝟒𝟎 𝜮𝒀 = 𝟖𝟓 𝜮𝒙𝟐 = 10 𝜮𝒚𝟐 = 30 𝜮𝒙𝒚 = 𝟗
𝜮𝑿 𝟒𝟎 𝜮𝒀 𝟖𝟓
ഥ=
X = =𝟖 ഥ=
Y = = 𝟏𝟕
𝑵 𝟓 𝑵 𝟓
𝜮𝒙𝟐 = 𝟏𝟎, 𝜮𝒚𝟐 = 𝟑𝟎, 𝜮𝒙𝒚 = 9
Regression Equation X and Y
𝝈𝒙 𝝈𝒙 𝜮𝒙𝒚 𝟗
 (X – 8) = 0.3 (Y – 17)
(X – 8) = 0.30Y -5.1
X = 8 – 5.1 + 0.3Y
X = 2.9 + 0.3 Y
Regression Equation Y on X
𝝈𝒚 𝝈𝒚 𝜮𝒙𝒚 𝟗
(𝒀 − 𝒀) = 𝒓 ഥ
𝒙−𝒙 = = = 𝟎. 𝟗
𝝈𝒙 𝝈𝒙 𝜮𝒙𝟐 𝟏𝟎
( Y – 17 ) = 0.9 (X – 8)
(Y – 17) =0.9X -7.2
Y = 17 – 7.2 + 0.9X
Y = 9.8 + 0.9X
(i) When value of X is 21, value of Y can be calculated as,
Y = 9.8 + 0.9(21) = 9.8 +18.9 = 28.7
(ii) When value of Y is 30, value of X can be calculated as,
X = 2.9 + 0.3 (30) = 2.9 + 9 = 11.90