Gotham City maintains a fleet of automobiles in a special motor pool. These cars are used by the various agencies when special needs arise for temporary use by personnel who do not have their own assigned automobiles.
The manager of the pool is trying to determine what factors contribute to the maintenance and repair costs of the cars under his care. He surmises that factors such as the mileage driven, the age of the car, and possibly even the make of the car contribute to maintenance and repair costs. Accordingly, he collects data on these factors for fifteen cars selected at random from the cars in the pool. The data are shown at the bottom of this page, and here in spreadsheet form.
As a first step in his analysis of these data, the manager calculates the average maintenance and repair cost for new, one-year-old, and two-year-old cars. The results are:
| Age | Number of Cars | Average Maintenance and Repair Costs |
|---|---|---|
| 0 | 5 | $688.80 |
| 1 | 5 | $682.80 |
| 2 | 5 | $695.00 |
Although he is somewhat surprised by the results, the manager concludes that the age of the car does not significantly influence the repair and maintenance costs.
As a next step, the manager calculates the average costs for each make of car. The results are:
| Make | Number of Cars | Average Maintenance and Repair Costs |
|---|---|---|
| Ford | 8 | $713.13 |
| Honda | 7 | $661.14 |
He concludes that he should, in the future, give preference to purchasing Hondas since he would save $52 each per year in maintenance and repairs.
Do you agree with the manager? How would you suggest that he analyze the data? What are your conclusions?
| Cost | Mileage | Age | Make (Ford=0, Honda=1) |
|---|---|---|---|
| $643 | 18.2 | 0 | 0 |
| $613 | 16.4 | 0 | 1 |
| $673 | 20.1 | 0 | 0 |
| $531 | 8.4 | 1 | 1 |
| $518 | 9.6 | 2 | 1 |
| $594 | 12.1 | 1 | 0 |
| $722 | 16.9 | 1 | 1 |
| $861 | 21.0 | 1 | 0 |
| $842 | 24.6 | 0 | 0 |
| $706 | 19.1 | 1 | 0 |
| $795 | 14.3 | 2 | 1 |
| $776 | 16.5 | 2 | 1 |
| $815 | 18.2 | 2 | 0 |
| $571 | 12.7 | 2 | 0 |
| $673 | 17.5 | 0 | 1 |
(Spurr and Bonini, Statistical Analysis for Business Decisions, Irwin 1973)