A company wanted to know if there is correlation between the demands and supply, data was...

A company wanted to know if there is correlation between the demands and supply, data was collected for a nine month as follows:

demand	20	30	40	50	60
supply	15	25	35	45	55

1-Using the formula for the sample correlation coefficient to evaluate the strength of the linear relationship.

2- Correlation Significance Test at α=0.05

T(0.05; 9 )	T(0.05; 7)	T(0.025;7)	T(0.025; 9)
1.833	1.895	2.365	2.262

Solutions

Expert Solution

Solution-

1) sample correlation calculation-

By formula sample correlation coefficient is 1.

Hence, there is strong and positive linear relationship between demand and supply.

2) Correlation significance test.

Alternative hypothesis is

By above test null hypothesis is rejected.

Hence, there is strong relationship between Demand and Supply

orchestra answered 1 year ago

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