ABC Ltd. has introduced a new product branded Nilan. The Production Manager wishes to establish the...
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ABC Ltd. has introduced a new product branded "Nilan". The Production Manager wishes to establish the relationship between the total cost of production and the number of units produced. The Production Manager also believes that the relationship between the total cost of producing "Nilan" and the number of units produced is linear in nature. The Production Manager has gathered the following data on the production for the last 8 months: Units produced "000" Total cost of production Sh."000" 675 6,900 6,480 6,990 7,200 8,560 6,720 6,300 5,250 Month December 2021 January 2022 February 2022 March 2022 April 2022 May 2022 June 2022 July 2022 Required: (i) (ii) (iii) 630 825 645 900 600 510 550 Estimate the total cost function using the ordinary least squares method. (7 marks) The coefficient of determination between the number of units produced and the total cost of production. (2 marks) (1 mark) Interpret your answer in (a) (ii) above. ABC Ltd. has introduced a new product branded "Nilan". The Production Manager wishes to establish the relationship between the total cost of production and the number of units produced. The Production Manager also believes that the relationship between the total cost of producing "Nilan" and the number of units produced is linear in nature. The Production Manager has gathered the following data on the production for the last 8 months: Units produced "000" Total cost of production Sh."000" 675 6,900 6,480 6,990 7,200 8,560 6,720 6,300 5,250 Month December 2021 January 2022 February 2022 March 2022 April 2022 May 2022 June 2022 July 2022 Required: (i) (ii) (iii) 630 825 645 900 600 510 550 Estimate the total cost function using the ordinary least squares method. (7 marks) The coefficient of determination between the number of units produced and the total cost of production. (2 marks) (1 mark) Interpret your answer in (a) (ii) above.
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Statistics For Managers Using Microsoft Excel
ISBN: 9780133130805
7th Edition
Authors: David M. Levine, David F. Stephan, Kathryn A. Szabat
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