You are in charge of costs estimating department for a national manufacturing company. As a in charge
Question:
You are in charge of costs estimating department for a national manufacturing company. As a in charge of the company you decided to estimate the Average Variable Cost function: and you obtained the following results from the estimation of the above equation. The computer printout for the regression analysis is: DEPENDENT AVCR-SQUARE F-RATIOP-VALUE ON F VARIABLE: OBSERVATIONS: 9 0.9383 45.527 0.0002 PARAMETER STANDARD VARIABLE ESTIMATE ERROR T-RATIOP-VALUE INTERCEPT 44.473 6.487 6.856 0.0005 -0.143 0.0482 -2.967 0.0254 0.000362 0.000079 4.582 0.0037 02 a) Do the parameter estimates have the correct signs? Determine whether the estimate values of the coefficients indicate a U- shaped AVC curve at the 5 percent level of significance. b) What is the estimated average variable cost function for this national manufacturing company? c) As you are in charge of this company wishes to product 350 units (Q) calculate the following: i) Marginal Cost i) Average Variable Cost m) Total Variable Cost d) At what level of output do you estimate average variable cost reaches its minimum value? e) What is estimated marginal cost when output is 700 units?
Operations management processes and supply chain
ISBN: 978-0136065760
9th edition
Authors: Lee J Krajewski, Larry P Ritzman, Manoj K Malhotra