Oil Quality and Price

question 102

Essay

Oil Quality and Price
Quality of oil is measured in API gravity degrees--the higher the degrees API,the higher the quality.The table shown below is produced by an expert in the field who believes that there is a relationship between quality and price per barrel. A partial Minitab output follows: Descriptive Statistics Variable N Mean StDev SE Mean Degrees 13 34.60 4.613 1.280 Price 13 12.730 0.457 0.127 Covariances Degrees Price Degrees 21.281667 Price 2.026750 0.208833 Regression Analysis Predictor Coef StDev T P Constant 9.4349 0.2867 32.91 0.000 Degrees 0.095235 0.008220 11.59 0.000 S = 0.1314 R−Sq = 92.46% R−Sq(adj)= 91.7% Analysis of Variance Source DF SS MS F P Regression 1 2.3162 2.3162 134.24 0.000 Residual Error 11 0.1898 0.0173 Total 12 2.5060
-{Oil Quality and Price Narrative} Use the residuals to compute the standardized residuals.

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Definitions:

Merchandising Firm

A business that purchases finished goods for the purpose of resale to consumers without altering the condition of the goods.

Merchandise Inventory

Goods or products that a company holds with the intention of selling them to customers as part of its business operations.

Selling Expenses

Costs incurred directly and indirectly from selling a product or service, including sales commissions, advertising, promotional materials, and the salaries of sales staff.

Budgeted Net Income

The estimated net income a company expects to earn over a specific period, as outlined in its budget.