Assuming That a Cost Is Mixed and Linear, and That

question 15

Multiple Choice

Assuming that a cost is mixed and linear, and that past cost behaviour is expected to continue into the future, which of the following is mostly likely the best technique for estimating future costs?

• A) Engineered estimate of cost
• B) Two-point method
• C) Scatter plot
• D) Regression analysis

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Definitions:

Monte Carlo Simulation

A computational algorithm that uses repeated random sampling to obtain numerical results, often used in physical and mathematical problem-solving.

Average Waiting Time

calculates the average duration customers or items wait before being serviced, often used in queue management to assess performance.

Monte Carlo Simulation

A computational technique used to model the probability of different outcomes in a process that cannot easily be predicted due to the intervention of random variables.

Standard Distribution

Often refers to a probability distribution that is used to represent the dispersion of a set of data around its mean, typically assumed to be a normal distribution.