Chapter PII, Problem 42RE

To determine

To develop a regression model to predict costs based on the level of production.

Answer to Problem 42RE

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Explanation of Solution

It is given in the question that a start-up company has developed an improved electronic chip for use in laboratory equipment. Thus, the table is given which shows chips produced and costs per chip. Thus, to develop a regression model to predict costs based on the level of production we will use Excel as we will first select the data in Excel and then go to the insert tab from where we will select the scatterplot option in the charts and when the scatterplot is constructed we will go to the design tab under the chart tools, from where we will select the quick layout option and select the layout with the equation option then the linear model is constructed in the scatterplot as:

  

Thus, the regression model is as: