AS SOON AS POSSIBLE

Mindy Curie is the new manager of the materials storeroom for Keller Manufacturing. Mindy has been asked to estimate future monthly purchase costs for part #696, used in two of Keller's products. Mindy has purchase cost and quantity data for the past 9 months as follows: (Click the icon to view the data for the past 9 months.) Estimated monthly purchases for this part based on expected demand of the two products for the rest of the year are as follows: Data Table 5 Click the icon to view the expected demand for the rest of the year.) Month Cost of Purchase .... Requirements Quantity Purchased 2,690 parts 12,425 vide an equation to estimate the future purd January February March 12,220 2,890 ea cost 17,525 4,164 April 16,115 3,761 May 13,000 2,989 June 13,867 3,354 15,322 3,699 July August September 2,298 10,061 14,960 3,572 1. The computer in Mindy's office is down, and Mindy has been asked to immediately provide an equation to estimate the future purchase cost for part #696. Mindy grabs a calculator and uses the high-low method to estimate a cost equation. What equation does she get? 2. Using the equation from requirement 1, calculate the future expected purchase costs for each of the last 3 months of the year. 3. After a few hours Mindy's computer is fixed. Mindy uses the first 9 months of data and regression analysis to estimate the relationship between the quantity purchased and purchase costs of part #696. The regression line Mindy obtains is as follows: y = $1,533.3 + 3.8X Evaluate the regression line using the criteria of economic plausibility, goodness of fit, and significance of the independent variable. Compare the regression equation to the equation based on the high-low method. Which is a better fit? Why? 4. Use the regression results to calculate the expected purchase costs for October, November, and December. Compare the expected purchase costs to the expected purchase costs calculated using the high-low method in requirement 2. Comment on your results. Data Table Print Done Purchase Quantity Expected Month October 3,310 parts 3,770 November December 3,030 Clear All Check