Cost Forecast Modeling

question 39

Essay

Cost Forecast Modeling. Elliot Ness, manager of product packaging at Chicago Tool & Die, Inc., is evaluating the cost effectiveness of the preventive maintenance program in his department. Ness believes that the monthly downtime of the packaging line due to equipment breakdown is related to the hours spent each month on preventive maintenance.
A. Write an equation to predict next month's downtime using the symbols D = downtime, M = preventive maintenance, t = time, a0 = constant term, a1 = regression slope coefficient, and assuming that downtime in the forecast month decreases by the same percentage as preventive maintenance increased during the preceding month.
B. If 75 hours were spent last month on preventive maintenance and this month's downtime was 50 hours, what should downtime be next month if preventive maintenance this month is 90 hours? Use the equation developed in part A.

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Definitions:

Slow-Twitch

Muscle fibers that are fatigue-resistant but generate less power, suited for endurance activities.

Ligament

A short band of tough, flexible, fibrous connective tissue that connects two bones or cartilages or holds together a joint.

Bronchoconstriction

A narrowing of the airways in the lungs due to the tightening of surrounding smooth muscle, leading to coughing, wheezing, and shortness of breath.

Airway Inflammation

The swelling and irritation of the air passages within the lungs, which can lead to symptoms such as coughing, wheezing, and shortness of breath.