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The Following Data Represent the Daily Demand (Y in Thousands

question 41

Essay

The following data represent the daily demand (y in thousands of units) and the unit price (x in dollars) for a product.  Daily Demand (y)  Unit Price (x) 4713933554433462081516306\begin{array} { l c } \text { Daily Demand (y) } & \text { Unit Price (x) } \\47 & 1 \\39 & 3 \\35 & 5 \\44 & 3 \\34 & 6 \\20 & 8 \\15 & 16 \\30 & 6\end{array}
a.
Compute and interpret the sample covariance for the above data.
b.
Compute and interpret the sample correlation coefficient.


Definitions:

Lower-Of-Cost-Or-Market

An accounting principle that values inventory at the lower of either its historical cost or its current market price.

Inventory Valuation

The method used to calculate the cost of goods available for sale and determining the ending inventory value for financial reporting purposes.

Ending Inventory

The value of goods available for sale at the end of an accounting period, calculated as beginning inventory plus purchases minus cost of goods sold.

Net Realizable Value

The estimated selling price in the ordinary course of business, minus the estimated costs necessary to make the sale.

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