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While scatter diagrams represent a simple way to
analyze relationships between factors, they involve statistical
concepts that are more complex than this simplicity may suggest.
Kohl Minor has learned about simple regression,
and has charted data that he intends to show the plant manager,
Ray O. Sonshine, making the assertion that the more tons of coal
mined, the higher cost to the company--a rather straightforward
Kohl's boss, Hal Zangels, looks at the chart, and
points out that the coefficient of determination is .76, asking
Kohl to explain what that might mean with respect to this set of
"Oh, that means that 76 percent of the time
the prediction of Y by means of X will be correct," Kohl explains
Has Kohl Minor overlooked the more complex information
that a simple scatter diagram offers, or is this explanation correct?
a) In this case, Kohl
is right, and has identified the role of Coefficient of Determination.
b) Kohl has gotten
carried away by the simplicity of the tool, and has overlooked the
meaning of an important statistical concept.
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