Bulging rule

Finishing wine

• Compute equation and find maximum
• Prediction: This is the prediction perspective
• Science perspective: Maybe large shelf space is in large stores? So changing shelf space doesn't change anything. Need to read details of experiment/data.
• Mathematics perspective: Show MLE computation.

Cell phones

• Introduce bulging rule
• Current statistics: here.
• Looks like March 2002 = 180 Million?

Assumptions

• Independence
• Normality
• Homoskadasticity
• (see page 44-46)

Checking assumptions

• Residuals approximately equal epsilons
• make residuals in JMP
• Look like a magnifying glass

Isolated points

• Trouble or an anoynance?
• deviations in Y direction = trouble (called outlier)
• deviation in X direction = anoynance (called high leverage)
• BOTH = influential point = big trouble!

Cottages

• important points might be leveraged

To do at home

• Look at managing benifits (page 23)
  • Can you use a transformation to fix this curvature?
  • Try a few to convience yourself of your answer
  • Follow the book in generating a polynomial fit
  • Compute maximum cost point
• Look at Crime (page 62) using JMP
• Read Direct mail (page 72)
• read introduction to class 3