There are two parts to this problem. Use Excel to perform the following: a. Generate a linear regression for each cost driver. Include a line fit plot. b. Identify the best cost driver for delivery costs. Explain your choice.
There are two parts to this problem. Use Excel to perform the following: a. Generate a linear regression for each cost driver. Include a line fit plot. b. Identify the best cost driver for delivery costs. Explain your choice.
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Question
Data of activities and weekly delivery costs | ||||
Date | Miles Driven | Packages Delivered | Delivery Stops | Delivery Cost |
1/1 | 2,656 | 15,700 | 12,175 | $ 5,479 |
1/8 | 2,085 | 12,756 | 9,019 | 4,608 |
1/15 | 2,719 | 17,555 | 12,358 | 5,428 |
1/22 | 2,998 | 18,547 | 12,507 | 5,826 |
1/29 | 3,655 | 13,030 | 12,476 | 4,846 |
2/5 | 2,650 | 18,355 | 9,910 | 4,250 |
2/12 | 2,829 | 16,719 | 11,906 | 5,073 |
2/19 | 2,056 | 17,751 | 10,833 | 4,668 |
2/26 | 2,890 | 19,379 | 9,883 | 4,841 |
3/5 | 2,341 | 15,542 | 10,184 | 4,363 |
3/12 | 2,269 | 12,546 | 9,724 | 4,859 |
3/19 | 2,632 | 16,346 | 10,735 | 4,689 |
3/26 | 2,588 | 17,832 | 11,579 | 5,332 |
4/2 | 3,254 | 17,990 | 12,681 | 5,714 |
4/9 | 2,956 | 19,877 | 12,940 | 5,914 |
4/16 | 2,368 | 15,917 | 10,495 | 4,615 |
4/23 | 2,879 | 12,970 | 12,021 | 5,115 |
4/30 | 2,142 | 17,467 | 10,756 | 4,414 |
5/7 | 2,671 | 13,410 | 11,515 | 5,316 |
5/14 | 3,165 | 15,245 | 11,694 | 5,356 |
5/21 | 2,742 | 19,088 | 12,610 | 5,888 |
5/28 | 2,383 | 16,454 | 9,983 | 4,727 |
6/4 | 2,111 | 13,400 | 10,659 | 4,756 |
6/11 | 2,358 | 16,191 | 11,723 | 4,911 |
6/18 | 2,563 | 12,693 | 9,177 | 4,363 |
6/25 | 2,472 | 16,145 | 10,213 | 4,891 |
7/2 | 2,345 | 12,243 | 9,025 | 4,400 |
7/9 | 2,612 | 15,280 | 11,086 | 5,010 |
7/16 | 2,655 | 15,243 | 12,161 | 5,482 |
7/23 | 2,625 | 14,700 | 10,140 | 4,556 |
7/30 | 2,345 | 18,145 | 12,764 | 5,683 |
8/6 | 2,659 | 16,090 | 12,445 | 5,640 |
8/13 | 2,318 | 14,770 | 12,159 | 4,776 |
8/20 | 3,456 | 18,878 | 12,097 | 4,828 |
8/27 | 2,987 | 18,719 | 12,134 | 5,730 |
9/3 | 2,436 | 15,452 | 10,727 | 4,854 |
9/10 | 2,261 | 12,565 | 9,823 | 4,500 |
9/17 | 2,492 | 16,432 | 12,038 | 5,422 |
9/24 | 2,659 | 16,365 | 12,560 | 5,476 |
10/1 | 1,951 | 17,093 | 12,394 | 4,837 |
10/8 | 2,445 | 16,296 | 11,030 | 4,925 |
10/15 | 2,922 | 16,583 | 11,892 | 5,560 |
10/22 | 2,890 | 18,556 | 11,446 | 5,341 |
10/29 | 2,189 | 16,624 | 12,241 | 4,904 |
11/5 | 2,520 | 18,357 | 11,587 | 4,710 |
11/12 | 2,377 | 14,729 | 10,769 | 5,222 |
11/19 | 2,143 | 15,341 | 10,111 | 4,380 |
11/26 | 3,145 | 15,607 | 11,526 | 4,945 |
12/3 | 2,872 | 18,360 | 9,734 | 4,950 |
12/10 | 2,146 | 16,940 | 11,257 | 4,568 |
12/17 | 2,960 | 15,688 | 10,434 | 5,102 |
12/24 | 2,185 | 18,589 | 11,295 | 4,532 |
12/31 | 2,248 | 18,707 | 9,888 | 4,749 |

Transcribed Image Text:Instructions:
There are two parts to this problem. Use Excel to perform the following:
a. Generate a linear regression for each cost driver. Include a line fit plot.
b. Identify the best cost driver for delivery costs. Explain your choice.

Transcribed Image Text:Problem
Zip Delivery is a small shipping company that delivers packages as a third party
contractor for Amazon. The cost accountant if selecting the 'best' cost driver to
use to allocate overhead costs. The three possible drivers she has selected are
number of miles driven on the routes, the number of packages delivered, and
the number of delivery stops. While one package is delivered to many of the
delivery stops, some stops have multiple packages, often requiring multiple trips
from the delivery truck to the customers' home or business location. The
accountant has assembled and provided data containing the weekly delivery
cost, miles driven, packages delivered, and number of delivery stops.
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