DeMarco Company is developing a cost formula for its packing activity. Discussion with the workers in the Packing Department has revealed that packing costs are associated with the number of customer orders, the size of the orders, and the relative fragility of the items (more fragile items must be specially wrapped in bubble wrap and Styrofoam).

Data for the past 20 months have been gathered:

Required:
1. Using the method of least squares, run a regression using the number of orders as the independent variable.

2. Runa multiple regression using three independent variables: the number of orders, the weight of orders, and the number of fragile items. Which regression equation is better? Why?
3. Predict the total packing cost for 25,000 orders, weighing 40,000 pounds, with 4,000 fragile items. Prepare a 99 percent confidence interval for this estimate of total packing cost.
4. How much would the cost estimated for Requirement 3 change if the 25,000 orders weighed 40,000 pounds, but only 2,000 were fragile items?LO1

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Month Packing Cost Number of Weight of Number of Orders Orders Fragile Items 1234567890 $ 45,000 11,200 24,640 1,120 58,000 14,000 31,220 1,400 39,000 10,500 18,000 1,000 35,600 9,000 19,350 850 90,000 21,000 46,200 4,000 $126,000 31,000 64,000 5,500 90,600 20,000 60,000 1,800 63,000 15,000 40,000 750 79,000 16,000 59,000 1,500 155,000 40,000 88,000 2,500 11 450,000 113,500 249,700 11,800 12 640,000 150,000 390,000 14,000 13 41,000 10,000 23,000 900 14 54,000 14,000 29,400 890 15 58,000 15,000 30,000 1,500 16 17 67 58,090 14,500 31,900 1,340 80,110 18,000 50,000 3,000 18 123,000 30,000 75,000 2,000 19 108,000 27,000 63,450 1,900 20 20 76,000 18,000 41,400 1,430