# consulting project production decisions at harding silicon enterprises, inc.

## Project Description:

compute total variable cost (tvc) by adding the appropriate columns of cost items.
compute average variable cost (avc). [remember that you are given an estimate of
hse’s future total fixed costs (\$6,500 per month).] print out the 19 months of data on
output (q) and total variable cost (tvc) and average variable cost (avc).
b. plot a scatter diagram of tvc on the vertical axis and q on the horizontal axis. does the
scatter diagram suggest a functional form for tvc? explain briefly.
c. plot a scatter diagram of avc on the vertical axis and q on the horizontal axis. does the
scatter diagram suggest a functional form for avc? explain briefly.
d. estimate a quadratic avc function. present the estimated equation and evaluate the
regression results (i.e., discuss the algebraic signs of the parameter estimates, the
significance levels, and the r2
).
e. evaluate the results of your regression equation in part a. specifically discuss algebraic
signs of parameters, statistical significance, and goodness of fit.
2. a. how many chips should be produced (monthly) if world chip prices are \$62 per chip?
forecast the hse’s profit at this output level.
b. how many chips should be produced (monthly) if world chip prices are \$35 per chip?
forecast the profit at this output level.
3. at what price should harding shut down and produce no chips in the short run?
Skills Required:
Project Stats:

Price Type: Fixed

Project Budget: \$0 to \$10
Expired
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