Holding goods in inventory is costly because inventoried goods are susceptible to breakage and other forms...
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Holding goods in inventory is costly because inventoried goods are susceptible to breakage and other forms of physical damage. Typically, the amount of damage (in dollars) increases with the level of inventory (expressed in dollars), but some of the damage is unrelated to the amount of inventory. The following data shows a company's inventory damage experience. Period Inventory Level (Millions of Dollars) 1 2 3 st 4 5 6 (O 7 $11 $15 $13 $10 $7 $9 $13 Damage (Thousands of Dollars) $80 $90 $70 $60 $50 $70 $80 Average Age of Inventory (Days) 31 45 98 15 25 31 82 interested in developing a forecast for the Damage for period 9. a) develop and provide the linear regression equation for the damage given the inventory level using the appropriate independent and dependent variables. b) How good is the relationship you found in a)? c) If the forecasted inventory level for period 10 is $17,000,000, what is the forecasted damage for Period 10? Holding goods in inventory is costly because inventoried goods are susceptible to breakage and other forms of physical damage. Typically, the amount of damage (in dollars) increases with the level of inventory (expressed in dollars), but some of the damage is unrelated to the amount of inventory. The following data shows a company's inventory damage experience. Period Inventory Level (Millions of Dollars) 1 2 3 st 4 5 6 (O 7 $11 $15 $13 $10 $7 $9 $13 Damage (Thousands of Dollars) $80 $90 $70 $60 $50 $70 $80 Average Age of Inventory (Days) 31 45 98 15 25 31 82 interested in developing a forecast for the Damage for period 9. a) develop and provide the linear regression equation for the damage given the inventory level using the appropriate independent and dependent variables. b) How good is the relationship you found in a)? c) If the forecasted inventory level for period 10 is $17,000,000, what is the forecasted damage for Period 10?
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a To develop the linear regression equation for the damage given the inventory level we can use the ... View the full answer
Related Book For
Modern Advanced Accounting in Canada
ISBN: 978-1259087554
8th edition
Authors: Hilton Murray, Herauf Darrell
Posted Date:
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