Quality Quiz:

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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 hypothesis indeed.

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 data.

"Oh, that means that 76 percent of the time the prediction of Y by means of X will be correct," Kohl explains quickly.

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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