QUESTION 4 <\/p>
Least-Squares Regression<\/p>
<\/p>
Serenity Living manufactures gas fireplaces for home use. Each unit produced goes through a complex quality control process. The company has observed quality control costs as follows over the past six weeks:<\/p>
Total<\/p>
Units Quality Control<\/p>
Week Produced Costs<\/p>
<\/p>
1 24 $540<\/p>
2 15 $400<\/p>
3 30 $620<\/p>
4 12 $380<\/p>
5 18 $480<\/p>
6 27 $580<\/p>
<\/p>
For planning purposes, the company's management wants to know the amount of variable quality control costs per unit and the total fixed quality control costs per week.<\/p>
<\/p>
Required:<\/p>
<\/p>
1.Using the least-squares regression method, estimate the variable and fixed elements of the quality control cost.<\/p>
2.Express the cost data in (1) above in the form Y = a + bX.<\/span><\/p> 3.<\/span>If the company produces 20 gas fireplaces next week, what would be the expected total quality control costs?<\/span><\/p> 4.Evaluate the economic plausibility of using units produced to predict total quality control costs.<\/p>",
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"edition": "1st Edition",
"authors": "Julie Dahlquist, Rainford Knight",
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"question_posted": "2024-06-29 02:24:43",
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