Greene Corporation manufactures a drink bottle, model CL$24.$ During $2020,$ Greene produced $190,000$ bottles at a total cost of $$874,000.$ Carlson Corporation has offered to supply as many bottles

as Greene wants at a cost of $$4\mathrm{.}50$ per bottle. Greene anticipates needing $204,000$ bottles each year for the next few years.

Read the requirements.Requirement $1$a$.$ What is the average cost of manufacturing a drink bottle in $2020?$ How does it compare to Carlson's offer?

The average cost of

per bottle is

than Carlson's offer.

Requirement $1$b$.$ Can Greene use the answer in requirement $1$a to determine the cost of manufacturing $204,000$ drink bottles? Explain.

Sreene

take the average manufacturing cost in $2020$ to determine the total cost of manufacturing $204,000$ drink bottles. The reason is that

Jarlson?

Stimate how much it would cost Greene to manufacture $204,000$ drink bottles, then calculate the cost to purchase the bottles.

Estimated cost to make the bottles

Cost to purchase the bottles

t will cost

to purchase the bottles rather than manufacture them in$-$house.

A$.$ Is the relationship between total manufacturing costs and quantity of drink bottles economically plausible?

B$.$ How good is the goodness of fit? That is$,$ how well does the estimated line fit the data?

C$.$ Does the slope of the regression line indicate that a strong relationship exists between manufacturing costs and the number of drink bottles produced?

Requirements

Requirement $1$a$.$ What

The average cost of

Requirement $1$b$.$ Can

take $t$

Requirement $2.$ Green

drink bottles produced :

Using this equation, est

Estimate how much it $W$

Estimated cost to make

Cost to purchase the b

Requirement $3.$ What $c$

a$.$ What is the average cost of manufacturing a drink bottle in $2020?$ How

does it compare to Carlson's offer?

b$.$ Can Greene use the answer in requirement $1$ a to determine the cost of

manufacturing $204,000$ drink bottles? Explain.

Greene's cost analyst uses annual data from past years to estimate the

following regression equation with total manufacturing costs of the drink

bottle as the dependent variable and drink bottles produced as the

independent variable:

$y=$$$435,000+$$$3\mathrm{.}00x$

During the years used to estimate the regression equation, the production of

drink bottles varied from $178,000$ to $214,000.$ Using this equation, estimate

how much it would cost Greene to manufacture $204,000$ drink bottles. How

much more or less costly is it to manufacture the bottles rather than to

acquire them from Carlson?

What other information would you need to be confident that the equation in

requirement $2$ accurately predicts the cost of manufacturing drink bottles?

Explain.

The reason is that

manufacturing costs of the drink bottle as the dependent variable and

uation, the production of drink bottles varied from $178,000$ to $214,000.$

tly is it to manufacture the bottles rather than to acquire them from