A manufacturing company wants to develop a budget to predict how monthly maintenance costs vary with activity
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Question:
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.
1. Use regression to determine which measure, Hours or Units (or both), should be used for the budget.
2. 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.
Related Book For
Probability and Statistics for Engineers and Scientists
ISBN: 978-0495107576
3rd edition
Authors: Anthony Hayter
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