Renton Industries makes replacement parts for the automobile industry.As part of the company's capacity planning,it needs a long-range total demand forecast.The following information was generated based on 10 years of historical data on total number of parts sold each year. Based on this information we can conclude that the linear trend model explains a significant proportion of the variation in the number of parts sold,because the p-value is much smaller than any reasonable α that we might use.

Question

Renton Industries makes replacement parts for the automobile industry.As part of the company's capacity planning,it needs a long-range total demand forecast.The following information was generated based on 10 years of historical data on total number of parts sold each year.  Based on this information we can conclude that the linear trend model explains a significant proportion of the variation in the number of parts sold,because the p-value is much smaller than any reasonable α that we might use.

Quizplus · Accepted Answer

The statement is true because a small p-value indicates that it is unlikely that the observed variation is due to random chance alone, and therefore we can conclude that the linear trend model is a good fit for the data.

Renton Industries Makes Replacement Parts for the Automobile Industry