Case Background

In 2008, Northern Airlines merged with Southeast Airlines to create the fourth largest U.S. carrier. Company was headed by Stephan Ruth, who concern is to create a financially strong company and he believes that it can be possible by reducing the maintenance costs. It is noted that, Southeast airline had new/ young fleet compared to northern airlines. In concern to this Ruth has noted that there has been significant difference between in reported B737-200 maintenance cost both in airframe and engines areas between Northern Airlines and Southeast Airlines. To ascertain this issue Ruth assigned Peg Young, vice president for operations and maintenance. The task of the Peg Young is to report Ruth with answer along with quantitative and graphical descriptions about the following: 1) Whether the average fleet age was correlated to direct airframe maintenance cost 2) Whether there was a relationship between average fleet age and direct engine maintenance costs. The fleet data are shown in the following table. Airframe cost data and engine cost data are both shown paired with fleet average age.

It is known that fleet ages of southeast airline are lesser than the Northern fleet. Hence, we will check the correlation between averag...

-1.0 -200 0 0.00264 0.00407 0.625 0.7 0.87715 1 1.636 1009.9684 1035.5524 1074.5284 11077 1118935328 11717 122699929 1264.5136 1289166.95 13.29 13275 137288089 1448028.6 1474852.48 15215 176.6241 176225625 181181 183465.94 18390 196.08 2 20.6 2001 2002 2003 2004 2005 2006 2007 2008 204846.75 231496225 236844.8 25.15 25.34 26081449 2683.24 293690.04 3 3016.2064 306951.92 31.78 32.18 32.78 32744.1453 33327529 337321.6 338192100 35.56 386937680 4 4060.2384 42406144 461547.68 472.51 4747.21 4858.09 5 51.8 5107 51122500 51158 54.92 54169600 5773 5835.825 5961316.03 6199.9876 63.72 632.5225 642.1156 6512 66341025 67872.03 68.9 68211081 69.7 70627216 7150 7179.1729 7360 772066.9 78.74 807301.3 8145 8259 84.73 8404 845883 84590 87684496 9364 age airfram airlin along analysi anoth answer area ascertain assign averag avg axi b b0 b1x b737 background believ best bx call carrier case check co co-effici compani compar concern construct correl cost cost/airline creat data degre depend descript design differ direct effici element engin equat evalu everi factor fall financi find first five fix fleet follow fourth function generat graphic head henc hrs increas independ intercept issu know known largest lesser line low mainten mathemat mean measur merg method model moder moment n negat new northern note number nσx2 nσxi nσy2 one oper pair part pearson peg plus point posit possibl predict presid process product quantit r reduc regress related relationship report repres ruth score second section separ shown signific simpl simplifi sinc slope small southeast southest sqrt squar stephan straight strong sum tabl task total two u.s unit use valu variabl vice whether x x2 xy y y2 year young σx σx2 σxi σy σy2