TABLE 13-12
the Manager of the Purchasing Department of a Large

question 31

Multiple Choice

TABLE 13-12
The manager of the purchasing department of a large banking organization would like to develop a model to predict the amount of time (measured in hours) it takes to process invoices. Data are collected from a sample of 30 days, and the number of invoices processed and completion time in hours is recorded. Below is the regression output:
$$\begin{array}{l}\text { Regression Statistics }\\\begin{array} { l c } \hline \text { Multiple R } & 0.9947 \\\text { R Square } & 0.8924 \\\text { Adjusted R Square } & 0.8886 \\\text { Standard Error } & 0.3342 \\\text { ations } & 30 \\\hline\end{array}\end{array}$$

$\begin{array}{lrrccc}\hline & \text { d f } & \text { SS } & \text {MS} & \text { F } & \text { Significance F } \\\hline \text {Regression} & 1 & 25.9438 & 25.9438 & 232.2200 & 4.3946 \mathrm{E}-15 \\ \text {Residual }& 28 & 3.1282 & 0.1117 & & \\ \text {Total }& 29 & 29.072 & & & \\\hline\end{array}$

$\begin{array}{lrrrrrr}\hline & \text { Coefficients }& \text { Standard Error }& \text { t Stat }& \text { p -value}& \text {Lower 95\%} & \text {Upper 95\%} \\\hline \text { Invoices }& 0.4024 & 0.1236 & 3.2559 & 0.0030 & 0.1492 & 0.6555 \\ \text {Processed }& 0.0126 & 0.0008 & 15.2388 & 4.3946 \mathrm{E}-15 & 0.0109 & 0.0143 \\\hline\end{array}$





-Referring to Table 13-12, the estimated average amount of time it takes to process one additional invoice is

• A) 0.0126 more hours.
• B) 0.0126 fewer hours.
• C) 0.4024 more hours.
• D) 0.4024 fewer hours.

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Definitions:

Types Of Inventory

Types Of Inventory categorize stock into various forms such as raw materials, work-in-progress, and finished goods, each serving different roles in production and sales processes.

Ordering Costs

Expenses incurred in placing and receiving orders from suppliers, including costs related to ordering processing, transport, and receiving.

Carrying Costs

Expenses associated with holding or storing inventory over a certain period, including warehousing, insurance, and spoilage costs.

Optimal Order Quantity

Refers to the number of units that should be ordered to minimize the total inventory costs like ordering, holding, and shortage costs.