Questions:

1. Complete this worksheet.
2. Are the results of the calculations, correct?
3. How logical and complete are your explanations?

Scenario

A manufacturer of vehicles has found that they underestimated their total budget for freight charges even though the actual average cost per car and the estimated average cost per car were the same. Help them puzzle out what caused the discrepancy. Figure 1 Freight Cost per Car

Location	Actual Average Cost/ Car	Estimated Average Cost / Car
San Diego, CA	$1,800.00	$ 1,500
Bath, ME	$1,600.00	$ 1,500
Minneapolis, MN	$1,500.00	$ 1,500
Gary, IN	$500.00	$ 1,000
New York, NY	$2,200.00	$ 2,100
Mean
Median
Standard Deviation (STDEV)
Total Average Cost for Shipping 170 cars

Q1. Average Freight Costs

A). Calculate the shaded cells for Figure 1 for the "Actual Average Cost/Car" and "Estimated Average Cost/Car":

1. Mean?
2. Median?
3. Standard Deviation?
4. Total Average Cost for Shipping 170 cars?

B). Why do you think the mean differs from the median in each column?

C). Which column has a larger standard deviation? What is the standard deviation telling us about the difference between the estimated costs and the actual cost?

Q2. Cause and Effect

D). Discuss factors that might make shipping costs for vehicles differ from location to location. The manufacturer has some additional information about the freight charges based on the number of cars shipped to each city.

Figure 2 - Actual Cars Shipped Per Locationand Actual Costs

City	Avg Cost per Car	# of Cars	Total Cost per City
San Diego, CA.	$1,800	20
Bath, ME.	$1,600	20
Minneapolis, MN.	$1,500	20
Gary, IN.	$500	10
New York, NY.	$2,200	100
Totals		170
Average Cost per Car (Total Cost/Total # of Cars)

Q3- Evaluate Additional Factors

a). Before calculating the shaded cells, look at the grid. Can you predict which numbers are going to have the most impact on the calculation of Total Cost? Why?

b). What is the Total Actual Cost to ship all 170 cars? How does this differ from their Estimated Total Cost to ship 170 cars in Q1? c). What was the Average Cost per Car in Figure 1? What is the Average Cost per Car in Figure 2? Why are these different?

d). What recommendations do you have for estimating the Total Shipping Costs for next year?