Chapter 6 - Problem 3DBC, a manufacturer of high end racing bicycles, is interested in determining the costassociated with the warranty costs on their bicycles. Three cost drivers are believed to beimportant in explaining the cost of this activity: the speed (ft/min.) of the manufacturingline, the number of defective products produced and the hours of inspection. Todetermine if this hypothesis is valid, the company's analysts examined the past 3 years ofwarranty cost data and ran a multiple regression analysis. The following output isobtained:ParameterInterceptLine SpeedNumber of defectsInspection hoursR² = 0.88Observations 250Questions:1.2.3.4.Estimate3,3002550-15t-stat80.005.312.58-1.96Pr>t.0001.0033.0050.0250Determine the estimated cost model for DBC's warranty repair cost.If DBC expects to run their line at 30 ft/ min. and to have 65 defects per week and tospend 40 hours on inspection, what is their anticipated warranty repair cost?Is Line Speed positively or negatively correlated with warranty costs? What aboutNumber of Defects? Inspection hours?What does R² indicate in this equation? Overall, what is your evaluation of the costmodel at predicting warranty repair activity?

Q-1The estimated cost model can be written as:Plugging in the given values from the table:

Answered: DBC, a manufacturer of high end racing…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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