Pricing Communications Nodes. The cost of adding a new communications node at a location not currently included on the network was of concern to a major Fort Worth manufacturing company. To try to predict the price of new communications nodes, data were obtained on a sample of existing nodes. The installation cost (COST) and the number of ports (NUMPORTS) available for access in each existing node were readily available. Data on two additional characteristics of communications nodes were also obtained: bandwidth (BANDWIDTH) and port speed (PORTS PEED). These data are shown in Table 4.6 and are available on the CD in a file named COMNODE4.
The network administrator wants to develop a method of estimating the cost of new nodes in a quick and fairly accurate manner. You have been asked to help in this project. Using the data available, develop an equation to help in the pricing of new communications nodes. Justify your choice of equation.
Start with all three explanatory variables in the equation. Do you encounter any problems when you estimate this equation? Request variance inflation factors for the variables included in the regression. What do the VIFs tell you?
TABLE 4.6: Data for Communications Nodes Exercise
Cost | Number of Ports | Bandwidth | Port Speed |
52,388 | 68 | 58 | 653 |
51,761 | 52 | 179 | 499 |
50,221 | 44 | 123 | 422 |
36,095 | 32 | 38 | 307 |
27,500 | 16 | 29 | 154 |
57,088 | 56 | 141 | 538 |
54,475 | 56 | 141 | 538 |
33,969 | 28 | 48 | 269 |
31,309 | 24 | 29 | 230 |
23,444 | 24 | 10 | 230 |
24,269 | 12 | 56 | 115 |
53,479 | 52 | 131 | 499 |
33,543 | 20 | 38 | 192 |
33,056 | 24 | 29 | 230 |
We need at least 10 more requests to produce the solution.
0 / 10 have requested this problem solution
The more requests, the faster the answer.