Lesson 5: Residual Analysis and R-Squared

September 6, 2015

Mon Sep 7

Review:

Presentation:

  • Residual Analysis
    • Individual Residuals
    • Residual Plot(s)
    • Residual Sum of Squares (SSE) and Total Sum of Squares (SSyy)
    • Coefficient of Determination
      • Calculation of r-squared
      • Relationship to Pearson Correlation Coefficient

Activity:

  • Use data on Table 12.4 on p. 479
    • Calculate and plot residuals
    • Calculate r-squared
    • Scatter Plot of Actual (y) vs Predicted (y-hat)

Assignment:

  • Use your 10 countries GDP and Fertility data to complete the following in Sheets
    • Calculate and plot residuals
    • Calculate r-squared
    • Scatter Plot of Actual (y) vs Predicted (y-hat)
    • Share results on blog

Justin

Justin Holman is CEO of Aftermarket Analytics, where he leads efforts to develop cutting edge sales forecasting and inventory optimization technology for the Automotive Aftermarket. Prior to joining Aftermarket Analytics, Justin managed corporate consulting for the Strategy & Analytics division at MapInfo Corporation, leading major projects for retail clients including The Home Depot, Darden Restaurants, Bridgestone-Firestone, Sainsbury’s and New York & Company. Before that, Justin served as Vice President of Software Development at LogicTools, now part of IBM's supply chain application software group. Justin holds a B.A. from Claremont McKenna College, a Ph.D. from the University of Oregon and an Executive Management certificate from Northwestern University's Kellogg School of Management.

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