Case problem #5 Finding the Best Car Value
Finding the Best Car Value
When trying to decide what car to buy, real value is not necessarily determined by how much you spend on the initial purchase. Instead, cars that are reliable and don’t cost much to own often represent the best values. But, no matter how reliable or inexpensive a car may cost to own, it must also perform well.
To measure value, Consumer Reports developed a statistic referred to as a value score. The value score is based upon five-year owner costs, overall road-test scores, and predicted reliability ratings. Five-year owner costs are based on the expenses incurred in the first five years of ownership, including depreciation, fuel, maintenance and repairs, and so on.
2. Use regression analysis to develop an estimated regression equation that could be used to predict the value score given the price of the car.
3. Use regression analysis to develop an estimated regression equation that could be used to predict the value score given the five-year owner costs .
4. Use regression analysis to develop an estimated regression equation that could be used to predict the value score given the road-test score.
5. Use regression analysis to develop an estimated regression equation that could be used to predict the value score given the predicted reliability.
6. What conclusions can you derive from your analysis?
