A Production Company Is Studying the Relationship Between the Average

question 21

Essay

A production company is studying the relationship between the average cost/unit and number of units produced in a batch. A sample of 10 batches is selected and the data is given below.
​ $$\begin{array} { | c | c | } \hline \text { No. of units produced } & \text { Cost/unit } \\\hline 20 & 37.7158 \\\hline 35 & 35.0158 \\\hline 50 & 30.8158 \\\hline 65 & 25.8158 \\\hline 80 & 20.0364 \\\hline 95 & 16.9064 \\\hline 110 & 16.3766 \\\hline 120 & 13.8564 \\\hline 135 & 13.9696 \\\hline 150 & 13.847 \\\hline\end{array}$$
a. Develop a scatter chart for these data. What does the scatter chart indicate about the relationship between average cost/unit and number of units produced?
b. Regardless of your answer to part (a), develop an estimated simple linear regression equation for the data. How much variation in the sample values of cost/unit is explained by this regression model?

---

Definitions:

Standardizing Processes

Standardizing Processes involves creating uniform procedures or protocols to ensure consistency, efficiency, and quality in the execution of tasks or operations.

Non-Routine Work

Work that involves dealing with unexpected conditions and problems, requiring creativity and problem-solving skills.

Informal Communication

The exchange of information unofficially within an organization, often through casual conversations.

Small Organizations

Organizations characterized by a limited number of employees, resources, or scale of operations, often resulting in closer interpersonal relationships and more flexible structures.