Davidson Engine Repairs provides maintenance and repair services for small engines such as those found in lawn mowers, power saws, and snow throwers. The repair shop costs include the salaries for the mechanics, insurance and depreciation on the repair equipment, materials and parts used for the jobs, and utilities. The repair shop manager would like to develop a model for predicting repair costs and over the past 10 months has carefully recorded the total repair costs incurred, along with the number of maintenance and repair jobs completed each month. The data are shown below:
1. Using Microsoft Excel, prepare a scattergram by plotting jobs performed and repair costs on a graph. Fit a straight line to the plotted points using the “add trendline” feature in Microsoft Excel. Do repair costs appear to be related to the number of jobs completed in a month? Explain.
2. Using the high–low method, estimate a cost formula for repair costs. Express the formula in the form Y = a + bX.
3. Now assume the manager wants to predict costs for a month where 600 jobs will be completed. Should you use the formula developed above to predict costs for a 600-job month? Why or why not?

  • CreatedJuly 08, 2015
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