For several years, many utilities have employed regression analysis to forecast monthly utility usage by residential customers
Question:
1. Change in temperature. Each degree increase in temperature causes an increase in the number of MCFs consumed. The relationship between the change in temperature and the usage of MCF is not linear, but the monthly bill shows the average change in temperature for the month and the increase or decrease in MCF related to that change.
2. Number of billing days in the period.
3. The residualthe change in usage by the customer that is not attributable to temperature or the number of days in the billing period.
A customer of Dominion has used 13.7 MCF in December and is charged $12.50 per MCF for a total bill that month of $171.25. The following data are available to compare the current months weather and billing period to the prior month and to the same month last year:
Required
1. Determine the amount of difference in the customers bill from the prior month and from the current month last year.
2. How does Dominions billing system affect environmental sustainability?
Step by Step Answer:
Cost Management A Strategic Emphasis
ISBN: 9781259917028
8th Edition
Authors: Edward Blocher, David F. Stout, Paul Juras, Steven Smith