Question: An industrial engineer is trying to study the relationship between the average stock in the warehouse and the total inventory cost. /she collected the following

An industrial engineer is trying to study the relationship between the average stock in the warehouse and the total inventory cost. /she collected the following data:

Month

Average stock level (units)

Total warehouse cost ($)

June

19500

44000

July

21000

46300

August

18500

42000

September

16200

39430

  1. Using the high-low method, estimate a cost formula between the average stock level and the total warehouse cost.
  2. Estimate the cost during October if the average stock of the last year was 13500 units.
  3. If at October this year, the total warehouse cost was equal to 26,650. What would have the average stock level inventory been?

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