# CORRELATION ANALYSIS

CORRELATION ANALYSIS

Assignment Overview
The Assembly Department Manager (the same one as in Case 2) is now concerned about the scrap rate that he sees on the Quarterly Scrap Rate Report for his department.

The weekly scrap rate data is shown here.
Week    Scrap/ Rework
1    9.8%
2    9.4%
3    11.9%
4    7.8%
5    12.1%
6    10.0%
7    11.6%
8    11.8%
9    5.8%
10    9.7%
11    11.2%
12    10.3%
13    10.7%
Your first instinct is to analyze this data is to see if there is a correlation between the scrap rate and the production of good pieces or the amount of hours worked.

So you match up week for week the scrap rate and the production output to determine the correlation. And then you do it again with the hours worked.
Case Assignment
Choose either the Production data or the Hours Worked data from Case 2. Do a correlation analysis of this data with the Scrap Rate.
Assignment Expectations
Do the following:
a.    Calculate the Coefficient of Determination
b.    Calculate the Coefficient of Correlation
c.    Calculate the Covariance and show the alternate calculation
d.    Test the significance of the Correlation Coefficient
e.    Generate the Data Analysis using the Excel Covariance Data Analysis
Write a two to three page paper explaining what you did and interpret the results of the correlation analysis. Be sure to reference the results of the data analysis

for both correlation calculations. Include other references that you use. Submit the paper as the case and upload the Excel file into Additional files.