Zikmund, Inc., a manufacturer of heavy machinery, is interested in improving its factorysafety record. Sybil Dane, Zikmund's controller, has investigated the past three years of in¬

dustrial accidents, both at Zikmund and at other similar factories. She has found that more accidents seem to happen during months with greater hours of overtime worked. In addi¬

tion, she thinks that employee safety could be enhanced by a vigorous safety program. To test her hypotheses, she ran multiple regression on 36 months of data for Zikmund for three variables: the cost of industrial accidents, the number of hours of safety training, and the number of hours of overtime worked by production workers. The following printout was obtained:

Required:
1. Write out the cost equation for Zikmund's industrial accident cost.
2. If Zikmund expects to have 300 overtime hours worked next month and expects to spend 150 hours on safety training, what are the anticipated accident costs?
3. Calculate a 99 percent confidence interval for the prediction made in Requirement 2.
4. Is number of overtime hours positively or negatively correlated with accident costs?
Are hours of safety training positively or negatively correlated with accident costs?
5. What does mean in this equation? Overall, what is your evaluation of the cost equa¬
tion that was developed for the cost of industrial accidents?

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Parameter Estimate t for Ho Parameter = 0 Standard Error of Pr>! Parameter Intercept 1,450 80.00 .0001 125.00 Number of overtime hours 13 3.58 .0050 22.56 Hours of safety training -4.50 -1.96 .0250 5.103 R = 0.88 S = 150 Observations 36