Question: The inventory manager at a warehouse distributor wants to predict inventory cost ( Cost in $ ) based on order quantity ( Quantity in units

The inventory manager at a warehouse distributor wants to predict inventory cost (Cost in $) based on order quantity (Quantity in units). She thinks it may be a nonlinear relationship because its two primary components move in opposite directions: (1) order processing cost (costs of procurement personnel, shipping, transportation), which decreases as order quantity increases (due to fewer orders needed), and (2) holding cost (costs of capital, facility, warehouse personnel, equipment), which increases as order quantity increases (due to more inventory held). The accompanying data file includes monthly inventory costs and order quantities for the past 36 months. Evaluate the quadratic model in terms of variable significance (\alpha =0.05) and adjusted R2.

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