Essentials of Business Analytics (MindTap Course List)
2nd Edition
ISBN: 9781305627734
Author: Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher: Cengage Learning
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Chapter 8, Problem 21P
The president of a small manufacturing firm is concerned about the continual increase in manufacturing costs over the past several years. The following figures provide a time series of the cost per unit for the firm’s leading product over the past eight years:
- a. Construct a time series plot. What type of pattern exists in the data?
- b. Use simple linear regression analysis to find the parameters for the line that minimizes MSE for this time series.
- c. What is the average cost increase that the firm has been realizing per year?
- d. Compute an estimate of the cost/unit for next year.
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Midgett Co. has accumulated data to use in preparing its annual profit plan for the upcoming year. The cost behavior pattern of the maintenance costs must be determined. The accounting staff suggested that linear regression be employed to derive an equation for maintenance hours and costs. Data regarding the maintenance hours and costs for the last year and the results of the regression analysis are as follows:
Month
MaintenanceCost
Machine Hours
Jan.
$
5,040
620
Feb.
3,648
420
Mar.
4,320
520
Apr.
3,331
390
May
5,221
650
June
3,550
400
July
3,655
430
Aug.
5,365
690
Sept.
5,110
640
Oct.
4,866
610
Nov.
3,944
460
Dec.
3,790
440
Sum
$
51,840
6,270
Average
$
4,320.00
522.50
Average cost per hour ($51,840/6,270) = $8.27 (rounded to the nearest cent)r = 0.99821r2 = 0.99780The percent of the total variance that can be…
Midgett Co. has accumulated data to use in preparing its annual profit plan for the upcoming year. The cost behavior pattern of the maintenance costs must be determined. The accounting staff suggested that linear regression be employed to derive an equation for maintenance hours and costs. Data regarding the maintenance hours and costs for the last year and the results of the regression analysis are as follows:
Month
MaintenanceCost
Machine Hours
Jan.
$
5,000
600
Feb.
3,644
440
Mar.
4,400
610
Apr.
3,337
480
May
5,222
660
June
3,390
410
July
3,618
470
Aug.
5,384
630
Sept.
5,114
590
Oct.
4,883
590
Nov.
3,925
430
Dec.
3,850
350
Sum
$
51,767
6,260
Average
$
4,313.92
521.67
Average cost per hour ($51,767/6,260) = $8.27 (rounded to the nearest cent)
r = 0.85977
r2 = 0.73920
The percent of the total variance that…
am. 13.
Chapter 8 Solutions
Essentials of Business Analytics (MindTap Course List)
Ch. 8 - Consider the following time series data:
Using...Ch. 8 - Refer to the time series data in Problem 1. Using...Ch. 8 - Problems 1 and 2 used different forecasting...Ch. 8 - Consider the following time series data:
Compute...Ch. 8 - Consider the following time series...Ch. 8 - Consider the following time series...Ch. 8 - Refer to the gasoline sales time series data in...Ch. 8 - Prob. 8PCh. 8 - Prob. 9PCh. 8 - Prob. 10P
Ch. 8 - For the Hawkins Company, the monthly percentages...Ch. 8 - Corporate triple A bond interest rates for 12...Ch. 8 - The values of Alabama building contracts (in...Ch. 8 - The following time series shows the sales of a...Ch. 8 - Prob. 15PCh. 8 - The following table reports the percentage of...Ch. 8 - Consider the following time series: a. Construct a...Ch. 8 - Consider the following time series:
Construct a...Ch. 8 - Because of high tuition costs at state and private...Ch. 8 - The Seneca Children’s Fund (SCF) is a local...Ch. 8 - The president of a small manufacturing firm is...Ch. 8 - Consider the following time series: a. Construct a...Ch. 8 - Consider the following time series...Ch. 8 - The quarterly sales data (number of copies sold)...Ch. 8 - Prob. 25PCh. 8 - South Shore Construction builds permanent docks...Ch. 8 - Hogs & Dawgs is an ice cream parlor on the border...Ch. 8 - Donna Nickles manages a gasoline station on the...Ch. 8 - The Vintage Restaurant, on Captiva Island near...
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