Wyoming Wholesale has gathered the following data on the number of shipments received and the cost of receiving reports for the first seven weeks of 2010.
Number of Weekly Cost of
Shipments Received Receiving Reports
50 ......... $175
44 ......... 162
40 ......... 154
35 ......... 142
53 ......... 185
58 ......... 200
60 ......... 202
a. Using the high–low method, develop the equation for predicting weekly receiving report costs based on the number of shipments received.
b. What is the predicted amount of receiving report costs for a week in which 72 shipments are received?
c. What are the concerns you have regarding your prediction from part (b)?