Arfaei Company manufactures chairs. Because the efforts of manufacturing are approximately equal between labour and machinery, management is considering other possible cost drivers. By considering different cost drivers, it is anticipated that the estimating process can be improved. The following cost estimating equations with their r2 values have been determined for 2012:
Required:
a. Which equation should be selected for the analysis?
b. What other factors should be included in the selection of the estimating equation?
Definitions:
New-to-the-world Products
Products that represent a completely new market offering that has never been seen before, often introducing a groundbreaking innovation.
Law of First Movers
The advantage gained by the initial significant occupant of a market segment, often allowing for the establishment of strong brand recognition and customer loyalty.
Amazon Echo
A brand of smart speakers developed by Amazon, integrating the voice-controlled intelligent personal assistant service Alexa to perform a variety of functions and services.
Innovation
The introduction of new ideas, products, services, or processes that create value for businesses, consumers, and society as a whole.
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