The fluctuating price of oil has a big impact on the cost of a supply chain. As
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A regression analysis can help us determine the relationship.
a. Run a regression in Excel on this data with the price of diesel as the dependent variable. What is the regression equation that relates the price of diesel to the price of oil? What is the R-squared value? What is the p-value for the independent variable, the price of oil?
b. How much does this model predict that diesel will increase for every $10 increase in the price of oil?
c. Build a chart that shows the expected price of diesel for every $10 increment in the price of oil from $20 a barrel to $200 a barrel.
d. If oil is currently $100 a barrel and you expect it to increase by 40% to $140, what percent increase would you expect in the price of diesel fuel?
e. If oil is currently $40 a barrel and you expect it to increase by 100% to $80, what percent increase would you expect in the price of diesel fuel?
f. How would you use this information when running different network modeling scenarios?
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Related Book For
Supply Chain Network Design Applying Optimization and Analytics to the Global Supply Chain
ISBN: 978-0133017373
1st edition
Authors: Michael Watson, Sara Lewis, Peter Cacioppi, Jay Jayaraman
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