Essentials of Business Analytics (MindTap Course List)
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:

Chapter 8, Problem 21P, The president of a small manufacturing firm is concerned about the continual increase in

  1. a. Construct a time series plot. What type of pattern exists in the data?
  2. b. Use simple linear regression analysis to find the parameters for the line that minimizes MSE for this time series.
  3. c. What is the average cost increase that the firm has been realizing per year?
  4. 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…
9. NORTH-SOUTH AIRLINE CASE Northern Airline Data Engine Cost per Aircraft 43.49 Airframe Cost Average Age (Hours) 6,512 8,404 11,077 11,717 13,275 15,215 18,390 per Aircraft 51.80 Year 2001 2002 54.92 38.58 2003 69.70 51.48 2004 68.90 58.72 2005 63.72 45.47 2006 84.73 50.26 2007 78.74 79.60 Southeast Airline Data Engine Cost per Aircraft 18.86 Airframe Cost Average Age (Hours) 5,107 8,145 7,360 5,773 7,150 9,364 8,259 Year Per Aircraft 2001 13.29 2002 25.15 31.55 2003 32.18 40.43 2004 31.78 22.10 2005 25.34 19.69 2006 32.78 32.58 2007 35.56 38.07

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Essentials of Business Analytics (MindTap Course List)

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