Motorcycle Repair Cost
Motorcycle Insurance Appraisers Examine Motorcycles That Have

question 149

Essay

Motorcycle Repair Cost
Motorcycle insurance appraisers examine motorcycles that have been involved in accidental collisions and estimate the cost of repairs.An insurance executive claims that there are significant differences in the estimates from different appraisers.To support his claim he takes a random sample of six motorcycles that have recently been damaged in accidents.Three appraisers then estimate the repair costs of all six motorcycles.The data are shown below.
$$\begin{array}{l}\text { Bstimatad Repair Cost }\\\begin{array} { | c | c c c | } \hline \text { Motorcycles } & \text { Appraiser 1 } & \text { Appraiser 2 } & \text { Appraiser 3 } \\\hline 1 & 650 & 600 & 750 \\2 & 930 & 910 & 1010 \\3 & 440 & 450 & 500 \\4 & 750 & 710 & 810 \\5 & 1190 & 1050 & 1250 \\6 & 1560 & 1270 & 1450 \\\hline\end{array}\end{array}$$
-{Motorcycle Repair Cost Narrative} Set up the ANOVA Table.Use $\alpha$ = 0.05 to determine the critical values.

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Definitions:

Statistical Analysis

The process of collecting, exploring, and interpreting data to identify patterns, trends, and relationships, often used in research and business for decision-making.

Cost-Volume-Profit Graph

A visual representation showing the relationship between a company's costs, sales volume, and profits at various levels of activity.

Break-Even Point

The level of production or sales at which total revenues equal total expenses, resulting in no net loss or gain.

Operating Leverage

The degree to which a company uses fixed operating costs, with all else being equal, the higher the operating leverage, the more sensitive net operating income is to a given percentage change in sales.