REGRESSION ANALYSIS OF PRODUCTIVITY USING MIXED EFFECT MODEL

Abstract

Production plants of a company are located in several areas that spread across Middle and East Java. As the production process employs mostly manpower, we suspected that each location has different characteristics affecting the productivity. Thus, the production data may have a spatial and hierarchical structure. For fitting a linear regression using the ordinary techniques, we are required to make some assumptions about the nature of the residuals i.e. independent, identically and normally distributed. However, these assumptions were rarely fulfilled especially for data that have a spatial and hierarchical structure. We worked out the problem using mixed effect model. This paper discusses the model construction of productivity and several characteristics in the production line by taking location as a random effect. The simple model with high utility that satisfies the necessary regression assumptions was built using a free statistic software R version 2.6.1.