One potential problem in using regression analysis to find the relation between inputs and costs is that extreme observations can produce misleading regression results.

Question

Quizplus · Accepted Answer

Extreme observations, also known as outliers, can have a disproportionate effect on the regression line and produce inaccurate results. Therefore, it is important to identify and address outliers in the data before conducting regression analysis.

One Potential Problem in Using Regression Analysis to Find the Relation