To Investigate the Relationship Between Yield of Potatoes, Y, and Level

question 77

Essay

To investigate the relationship between yield of potatoes, y, and level of fertilizer
application, x, a researcher divides a field into eight plots of equal size and applies
differing amounts of fertilizer to each. The yield of potatoes (in pounds)and the fertilizer
application (in pounds)are recorded for each plot. The data are as follows: $\begin{array}{l|cccccccc}\hline x & 1 & 1.5 & 2 & 2.5 & 3 & 3.5 & 4 & 4.5 \\\hline y & 25 & 31 & 27 & 28 & 36 & 35 & 32 & 34 \\\hline\end{array}$

Summary statistics yield $S S _ { x x } = 10.5 , S S _ { y y } = 112 , S S _ { x y } = 25 , \bar { x } = 2.75$ , and $\bar { y } = 31$ . Find the least squares prediction equation.

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Definitions:

Forecasting Risk

The potential for future revenues or earnings to deviate from projected amounts due to variables that affect demand, supply, and pricing.

NPV Estimates

Calculations used to determine the Net Present Value of an investment, forecasting the difference between the present value of cash inflows and outflows.

Operating Leverage

A measure of how revenue growth translates into growth in operating income, indicating the degree to which a company can increase its profits by increasing sales, given its fixed costs.

Scenario Analysis

A process of analyzing possible future events by considering alternative possible outcomes (scenarios), thus helping in the decision-making process.