Question: DA 2 - 5 Analyzing Data Visualizations: Purchasing Department Costs D 2 - 5 Data Set ( s ) Assume you are the purchasing manager
DA Analyzing Data Visualizations: Purchasing Department Costs D Data Sets Assume you are the purchasing manager at Block for materials used in the chip reader. You have observed that as the company has increased its sales volume, the total cost to process purchase orders has increased as well, but not at a constant rate. You would like to estimate the cost to process purchase orders next month. You gather the following data for the last eight quarters. See data to the right. Required a Prepare a scatter diagram that shows the relationship between the number of purchase orders and purchase department costs for the last eight quarters. Based upon the scatter diagram, are purchasing department costs fixed, variable or mixed? b Estimate the average purchasing cost per purchase order at the low and high point of purchase orders using data from the chart. Assume no outliers in your analysis. c Use the highlow method to develop a costestimating equation for total annual operating costs. d If purchases for next quarter are expected to be units, what are expected purchasing department costs? e What are some reasons why the total cost to process purchase orders is not increasing at a constant rate? What trends do you expect in the average cost per unit in the purchasing department?
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