CD-R disk toaster A firm in Ireland produces compact disks, using a highly automated system. Unit costs depend heavily on volume and materials used per disk. The following operational costs have been recorded during the last 50 months (see data table).

Required:
1. Prepare a regression analysis and comment on the results.
It appears that in Month 26 a new production system has been installed.
2. Make a regression analysis, taking into account the impact of the new equipment on production costs. What conclusion do you reach, looking at the result of the regressions?
3. It turns out that the new technology, installed in Month 26, was meant to make the production system more efficient, lowering variable unit cost. Please construct a model that makes it possible to check whether the new equipment actually did bring down variable operational costs. What is your conclusion?

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Monthly production data Month Costs Units Month Costs Units 1 1111050 9582 26 1337996 8930 23456 907276 6587 27 1301138 9523 964251 7476 28 1233975 7486 1095 168 7317 29 1259107 9369 1142588 7988 30 1254780 8999 1010434 7599 31 1221303 6875 7 899632 6900 32 1274383 7548 8 1148963 8792 33 1200 426 8025 9 1053706 8334 34 1220104 7706 10 1129612 9061 35 1244227 8326 11 1019736 8612 36 1206917 8077 12 991070 8564 37 1268244 8590 13 957 888 7894 38 1182817 6749 14 989510 8144 39 1190218 6580 15 1051335 9274 40 1236386 8756 16 1026693 7248 41 1221166 8222 17 1035433 7432 42 1 159 764 6854 18 983009 7555 43 1189390 6863 19 1071943 8164 44 1199527 6916 20 913553 7209 45 1243826 7919 21 1122878 8854 46 1065796 6825 22 935338 6578 47 1199060 7360 23 1180295 8427 48 1202 430 8196 225 24 1037337 8815 49 1341998 9372 944171 7254 50 1214140 6595