A corporation has determined that when the quantity produced in units doubles from x to 2x, the average time per unit for 2x units is 90% of the average time per unit for x units. The decline in time per unit as production doubles is an example of An entity received a request for a competitive bid for the sale of one of its unique boating products with a desired modification. The entity is now in the process of manufacturing this product but with a slightly different modification for another customer. These unique products are labor intensive and both will have long production runs. Which one of the following methods should be used to estimate the cost of the new competitive bid? Regression analysis. B. Continuous probability simulation. C. Learning curve analysis. D. Expected value analysis 3- A corporation is developing a new product that will be manufactured in pairs. The company recently produced the first two units of this product using 200 hours of direct labor time. If the corporation has a 90% learning curve and uses the cumulative average-time learning model, the total direct labor time to manufacture the first four units of this new product is A. 324 hours. B. 360 hours. C. 400 hours. D. 380 hours. A company is an automobile replacement parts dealer in a large metropolitan community. The company is preparing its sales forecast for the coming year. Data regarding both the companys and industry sales of replacement parts as well as both the used and new automobile sales in the community for the last 10 years have been accumulated. If the company wants to determine whether its sales of replacement parts are dependent upon the industry sales of replacement parts or upon the sales of used and new automobiles, the company should employ A. Correlation and regression analysis. B. Simulation techniques. C. Statistical sampling. D. Time series analysis. 6 A manufacturer uses a cumulative average-time learning curve model to monitor labor costs. Data regarding two recently completed batches of a part that is used in tractor-trailer rigs is as follows: Batch Number Cumulative Average Number of Units Hours Per Unit 1 50 20 2 50 16 If the same rate of learning continues for the next several batches produced, which of the following best describes (1) the type (i.e., degree) of learning curve that the firm is experiencing and (2) the average hours per unit for units included in the 201-400 range of units produced (i.e., the last 200 units)? Type (Degree) of Average Hours Per Learning Curve Unit for Units 201-400 A. 80% 10.24 B. 80% 7.68 C. 20% 3.84 D. 20% 10.24 7- A manufacturer developed the following multiple regression equation, utilizing many years of data, and uses it to model, or estimate, the cost of its product. Cost = FC + (a L) + (b M) Where: FC = fixed costs L = labor rate per hour M = material cost per pound Which one of the following changes would have the greatest impact on invalidating the results of this model? A. A significant reduction in factory overheads, which are a component of fixed costs. B. A significant change in labor productivity. C. Renegotiation of the union contract calling for much higher wage rates. D. A large drop in material costs, as a result of purchasing the material from a foreign source. Fact Pattern: Alpha Company produces several different products and is making plans for the introduction of a new product, which it will sell for $6 a unit. The following estimates have been made for manufacturing costs on 100,000 units to be produced the first year: Direct materials $500,000 Direct labor $40,000 (the labor rate is $4/hour) Overhead costs have not been established for the new product, but monthly data on total production and overhead cost for the past 24 months have been analyzed using simple linear regression. The results below were derived from the simple regression and provide the basis for overhead cost estimates for the new product. Dependent variable (y) -- Factory overhead costs Independent variable (x) -- Direct labor hours Computed values: y intercept $40,000 Coefficient of independent variable $2.10 Coefficient of correlation 0.953 Standard error of estimate $2,840 Standard error of regression coefficient 0.42 Mean value of independent variable $18,000 Coefficient of determination 0.908 Question What percentage of the variation in Alphas overhead costs is explained by the independent variable? A. 95.3% B. 42% C. 90.8% D. 48.8% The results of regressing y against x are as follows: Coefficient Intercept 5.23 Slope 1.54 When the value of x is 10, the estimated value of y is A. 6.77 B. 20.63 C. 8.05 D. 53.84 The correlation coefficient that indicates the weakest linear association between two variables is A. 0.73 B. 0.11 C. 0.35 D. 0.12