A manufacturer of automobile spark plugs has several production facilities sprea

Question

A manufacturer of automobile spark plugs has several production facilities spread across a wide geographical area. The quality control manager at each plant budgets a certain amount of money (QC exist, measured in thousands of dollars) for quality control efforts each week (maintenance and calibration of equipment, time spent on process evaluation, etc.). Each manager also determines the percentage of defective spark plugs (% DBF) produced each week. The company's vice president of operations has collected a sample of data to determine the association between these variables. A scatterplot, fitted line, and summary output for a simple regression model are provided: Regression Analysis r^2 0.876 n 85 r - 0.936 s, 0.967 Dep. var. % DEF Regression output Using this model, we predict that each additional exist1000 spent on quality control efforts wall result in an average decrease in the percentage of defectives of: -876% 936% 4.98% 1.2045% 967%

Explanation / Answer

From the regression output

The equation is

%of Defectives = 12.0554-1.2045QC

Where QC is in thousands

So, For each additional $100 spent, average decrease is 1.2045% (Slope of the line)

Correct option is D

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