A manufacturing company wants to develop a budget to predict how monthly maintenance costs vary with activity levels. Management is trying to decide whether hours used or units produced is the better measure of maintenance cost. Monthly data for the preceding 24 months is given below.

Use regression to determine which measure, Hours or Units (or both), should be used for the budget. Your boss asks you to predict the maintenance cost when 1587 Hours are used and 178 Units are produced. Comment on how you would a respond to this prediction request from your boss.

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Month Hours Units Maintenance 1 2 3 4 st 5 6 7 1304 111 30800 1397 114 32900 1465 133 33800 1232 129 29900 1487 147 34200 1223 130 28700 1238 122 29600 Month Hours Units Maintenance 13 14 15 16 17 18 19 1301 138 1438 1194 1355 123 1244 124 144 30500 34000 29000 32600 1149 120 28200 120 30000 1158 106 28800 8 10 11 12 1406 119 31600 1179 105 28000 1272 125 30300 1344 126 31600 1324 145 31800 20 21 22 23 24 1418 150 33100 1117 121 26700 1340 116 31200 1334 129 30900 1387 150 32700 Month Hours Units Maintenance 1 2 3 4 st 5 6 7 1304 111 30800 1397 114 32900 1465 133 33800 1232 129 29900 1487 147 34200 1223 130 28700 1238 122 29600 Month Hours Units Maintenance 13 14 15 16 17 18 19 1301 138 1438 1194 1355 123 1244 124 144 30500 34000 29000 32600 1149 120 28200 120 30000 1158 106 28800 8 10 11 12 1406 119 31600 1179 105 28000 1272 125 30300 1344 126 31600 1324 145 31800 20 21 22 23 24 1418 150 33100 1117 121 26700 1340 116 31200 1334 129 30900 1387 150 32700

Answer rating: 100% (QA)

Below is given output of R software We first run linear regression in R Model and summary given belo... View the full answer