Liao Inc., a manufacturer of fine china and stoneware, is troubled by fluctuations in productivity and wants to compute how much manufacturing support costs are related to the various sizes of batches of output. The following data show the results of a random sample of 10 batches of one pattern of stoneware:

1. Plot support costs versus batch size.

2. Using regression analysis, measure the cost function of support costs and batch size.

3. Predict the support costs for a batch size of 20. 

4. Are there any anomalies in the plot or regression output that should cause concern about using the regression model to predict support costs based on batch size? Explain.

Transcribed Image Text:

Sample Batch Size, x Support Costs, y $180 15 140 12 20 230 17 190 160 12 300 25 22 270 110 240 18 10 320