SCENARIO 14-20-A
You Are the CEO of a Dairy Company $\left( X _ { 1 } \right)$

question 208

Multiple Choice

SCENARIO 14-20-A
You are the CEO of a dairy company. You are planning to expand milk production by purchasing
additional cows, lands and hiring more workers. From the existing 50 farms owned by the company,
you have collected data on total milk production (in liters) , the number of milking cows, land size (in
acres) and the number of laborers. The data are shown below and also available in the Excel file
Scenario14-20-DataA.XLSX.
S
You believe that the number of milking cows $\left( X _ { 1 } \right)$ , land size $\left( X _ { 2 } \right)$ and the number of laborers $\left( X _ { 3 } \right)$ are the best predictors for total milk production on any given farm.
-Referring to Scenario 14-20-A, which of the following is a correct interpretation for the r- square?

• A) 90.15% of the total variation in total milk production can be explained by the number of milking cows, the land size and the number of laborers.
• B) 90.15% of the total variation in total milk production can be explained by the number of milking cows, the land size and the number of laborers after adjusting for the level of Significance
• C) 90.15% of the total variation in total milk production can be explained by the number of milking cows, the land size and the number of laborers holding constant the effect of all The independent variables.
• D) 90.15% of the total variation in total milk production can be explained by the number of milking cows, the land size and the number of laborers after adjusting for the number of Predictors and sample size.

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Definitions:

Fixed Costs

Costs that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.

Operating Income

The profit realized from a business's core operations, excluding deductions of interest and tax, representing the efficiency of the company's core business.

Fixed Costs

Expenses that remain constant regardless of the amount of goods or services produced or sold, including lease payments, wage payments, and insurance premiums.

Variable Costs

Expenses that vary directly with the level of production or sales volume, such as raw materials and direct labor costs.