Question Workspace

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The president of a small manufacturing firm is concerned about the continual increase in manufacturing costs over the past several years. The table below provides a time series of the cost per unit for the firm's leading product over the past eight years.

Click on the datafile logo to reference the data.

Year	Cost/Unit ($)		Year	Cost/Unit ($)
1	20.20		5	26.80
2	24.70		6	30.30
3	28.50		7	31.20
4	27.10		8	36.30

(a)

Choose the correct time series plot.

(i)		(ii)
(iii)		(iv)

- Select your answer -Plot (i)Plot (ii)Plot (iii)Plot (iv)Item 1

What type of pattern exists in the data?

- Select your answer -Positive trend patternNegative trend patternHorizontal patternItem 2

(b)

Use simple linear regression analysis to find the parameters for the line that minimizes MSE for this time series.

If required, round your answers for the parameters to four decimal places and your answer for the MSE to two decimal places. Do not round your intermediate calculations.

y-intercept, b₀ =

Slope, b₁ =

MSE =

(c)

What is the average cost increase that the firm has been realizing per year?

If required, round your answer to two decimal places.

$

(d)

Compute an estimate of the cost/unit for next year.

If required, round your answer to two decimal places. Do not round your intermediate calculations.

$