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.

Year	Quarter	Cost/Unit ($)		Year	Quarter	Cost/Unit ($)
1	1	20.01		5	1	29.14
	2	17.44			2	32.63
	3	13.09			3	28.97
	4	18.13			4	25.10
2	1	20.25		6	1	25.70
	2	25.70			2	36.02
	3	22.98			3	26.97
	4	29.86			4	27.89
3	1	23.57		7	1	28.48
	2	20.32			2	28.96
	3	26.23			3	32.71
	4	25.15			4	28.19
4	1	21.00		8	1	37.96
	2	28.36			2	28.83
	3	32.51			3	37.50
	4	25.80			4	37.89

The data has been collected in the Microsoft Excel file below. Download the spreadsheet and perform the required analysis to answer the questions below.

Download spreadsheet mfgcosts-5827e5.xlsx

a.

Choose the correct time series plot.

The correct time series plot is

Plot B

A	Cost/Unit ($) Period (t) Time Series Plot The time series plot represents a trend in manufacturing costs per quarter over the past several years. The chart has a horizontal axis labeled Period (t) with values from 0 to 35 and a vertical axis labeled Cost/Unit ($) with values from 0 to 40. The time series contains 32 points connected by line segments. The segments and the approximate points they connect are as follows. The segments start at (1,34.87) and go down and right through 32 points to stop at (32,19.09).	B	Cost/Unit ($) Period (t) Time Series Plot The time series plot represents a trend in manufacturing costs per quarter over the past several years. The chart has a horizontal axis labeled Period (t) with values from 0 to 35 and a vertical axis labeled Cost/Unit ($) with values from 0 to 40. The time series contains 32 points connected by line segments. The segments and the approximate points they connect are as follows. The segments start at (1,20.01), go down and right through 2 points to (3,13.09), go up and right through 3 points to (6,25.70), go down and right to (7,22.98), go up and right to (8,29.86), go down and right through 2 points to (10,20.32), go up and right to (11,26.23), go down and right through 2 points to (13,21.00), go up and right through 2 points to (15,32.51), go down and right to (16,25.80), go up and right through 2 points to (18,32.63), go down and right through 2 points to (20,25.10), go up and right through 2 points to (22,36.02), go down and right to (23,26.97), go up and right through 4 points to (27,32.71), go down and right to (28,28.19), go up and right to (29,37.96), go down and right to (30,28.83), and go up and right to stop at (32,37.89).
C	Cost/Unit ($) Period (t) Time Series Plot The time series plot represents a trend in manufacturing costs per quarter over the past several years. The chart has a horizontal axis labeled Period (t) with values from 0 to 35 and a vertical axis labeled Cost/Unit ($) with values from 0 to 40. The time series contains 32 points connected by line segments. The segments and the approximate points they connect are as follows. The segments start at (1,37.89), go down and right through 2 points to (3,28.83), go up and right to (4,37.96), go down and right to (5,28.19), go up and right to (6,32.71), go down and right through 4 points to (10,26.97), go up and right to (11,36.02), go down and right through 2 points to (13,25.10), go up and right through 2 points to (15,32.63), go down and right through 2 points to (17,25.80), go up and right to (18,32.51), go down and right through 2 points to (20,21.00), go up and right through 2 points to (22,26.23), go down and right to (23,20.32), go up and right through 2 points to (25,29.86), go down and right to (26,22.98), go up and right to (27,25.70), go down and right through 3 points to (30,13.09), and go up and right to stop at (32,20.01).	D	Cost/Unit ($) Period (t) Time Series Plot The time series plot represents a trend in manufacturing costs per quarter over the past several years. The chart has a horizontal axis labeled Period (t) with values from 0 to 35 and a vertical axis labeled Cost/Unit ($) with values from 0 to 40. The time series contains 32 points connected by line segments. The segments and the approximate points they connect are as follows. The segments start at (1,19.09) and go up and right through 32 points to stop at (32,34.87).

What type of pattern exists in the data?

The time series plot shows a positive-linear trend with no apparent possible strong Seasonality.

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 three 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 the next quarter. If required, round your answer to two decimal places. Do not round your intermediate calculations.

$