Answered: University

Business

Operations Management

University

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter14: Data Mining

Section14.2: Classification Methods

Problem 3P

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The Baker Company wants to develop a budget to predict how overhead costs vary with activity levels. Management is trying to decide whether direct labor hours (DLH) or units produced is the better measure of activity for the firm. Monthly data for the preceding 24 months appear in the file P13_40.xlsx. Use regression analysis to determine which measure, DLH or Units (or both), should be used for the budget. How would the regression equation be used to obtain the budget for the firms overhead costs?
The owner of a restaurant in Bloomington, Indiana, has recorded sales data for the past 19 years. He has also recorded data on potentially relevant variables. The data are listed in the file P13_17.xlsx. a. Estimate a simple regression equation involving annual sales (the dependent variable) and the size of the population residing within 10 miles of the restaurant (the explanatory variable). Interpret R-square for this regression. b. Add another explanatory variableannual advertising expendituresto the regression equation in part a. Estimate and interpret this expanded equation. How does the R-square value for this multiple regression equation compare to that of the simple regression equation estimated in part a? Explain any difference between the two R-square values. How can you use the adjusted R-squares for a comparison of the two equations? c. Add one more explanatory variable to the multiple regression equation estimated in part b. In particular, estimate and interpret the coefficients of a multiple regression equation that includes the previous years advertising expenditure. How does the inclusion of this third explanatory variable affect the R-square, compared to the corresponding values for the equation of part b? Explain any changes in this value. What does the adjusted R-square for the new equation tell you?
Kay and Micheal Passe publish what's Happening?--a biweekly newspaper to publicize local events. whats happening? has a few subscribers; it typically is sold at checkout stands. Much of the revenue comes from advertisers of garage sales and supermarket specials. In an effort to reduce costs associated with printing too many papers or delivering them to the wrong location, Micheal implemented a computerized system to collect sales data. Sales-counter scanners accurately record sales data for each location. Since the system was implemented, total sales volume has steadily declined. selling advertising space and maintainting shelf space at supermarkets are getting deifficult. Reduced revenue makes controlling costs all the more important. For each issue. Micheal caefully makes a forecast based on sales data collected at each location. Then he orders papers to be printed and distributed in quantities matching the forecast. Micheal's forecast refect a downward trend, which is present in the…
Lew Pherson and Vera Collier are friends whoare employed by different CPA firms. One day during lunch they are discussing theimportance of internal control in determining the amount of audit evidence requiredfor an engagement. Pherson expresses the view that internal control must be evaluatedcarefully in all companies, regardless of their size or whether they are publicly held,in a similar manner. His CPA firm requires a standard internal control questionnaireon every audit as well as a flowchart of every transaction area. In addition, he says thefirm requires a careful evaluation of the system and a modification in the evidenceaccumulated based on the controls and deficiencies in the system.Collier responds by saying she believes that internal control cannot be adequate inmany of the small companies she audits; therefore, she simply ignores internal controland acts under the assumption of inadequate controls. She goes on to say, “Why should Ispend a lot of time obtaining an…
Graph the provided data as the correct graph type
Interpret the coefficients of your regression model. Specifically, what does the fixed component of the model mean to the consulting firm? Interpret the fixed term, b 0b0, if appropriate. Choose the correct answer below. A. It is not appropriate to interpret b 0b0, because its value is the predicted billable hours for overhead costs of 0 dollars, but the firm cannot have overhead costs of 0 dollars associated with a client. B. The value of b 0b0 is the predicted overhead costs for 0 billable hours. C. It is not appropriate to interpret b 0b0, because its value is the predicted overhead costs for 0 billable hours, but someone with 0 billable hours would not actually be a client of the firm. D. For each increase of 1 unit in billable hours, the predicted overhead costs are estimated to increase by b 0b0. E. The value of b 0b0 is the predicted billable hours for an overhead cost of 0 dollars. F. For each increase of 1 unit in…
Within the process in the "monitoring" section, we consider the indicators (choose the correct answer): a. clearly insufficient b. superfluous and interpretable c. the best tool for decision making
Choose all answers that form a true statement: “When performing Savitzky–Golay polynomial smoothing, increasing the number of data points used to perform the smoothing can result in …”: a. spectral distortion b. noisy data c. a decrease in the number of points in the data set. d. a shift in the data points to the right. For each option above (a-d) that forms a true statement, explain why it is true and what the ramification is for using smoothed data to interpret the behavior of the chemical system under study.
. Alexandera is the Research manager with Freezemore Appliances. Freezemore has bee receiving a LOT of complaints with one of it’s most popular refrigerators. The refrigerator freezes everything in both the freezer and the refrigerator freeing everything inside. The vice president of marketing told Alexandra that “we need to quickly discover how to turn this problem into a desirable situation. You need to determine the underlying cause of the problem and perhaps even make improvements to the freezer.” When Alexandra analyzes the underlying causes of the freezing problem, which function is she performing? a. analytics b. feasibility c. MBO d.synergy e. diagnosis
1.) Use the following dummy variables to develop an estimated regression equation to account for seasonal effects only in the data. Qtr1 = 1 if Quarter 1, 0otherwise; Qtr2 = 1 if Quarter 2, 0 otherwise, Qtr3 = 1 if Quarter 3, 0otherwise. Based only on the seasonal effects in the data, compute estimates of quarterly sales for year 6.a. Report the estimate of sales for Year 6 Quarter 1. (Enter a whole value.)b. Report the estimate of sales for Year 6 Quarter 4. (Enter a whole value.)2.) Let Period t = 1 refer to the observation in quarter 1 of year 1; Period t = 2refer to the observation in quarter 2 or year 1; … and Period t = 20 refer to the observation in quarter 4 of year 5. Using the dummy variables defined in part (b) and Period (t), develop an estimated regression equation to account for seasonal effects and any linear trend in the time series. Based upon the seasonal effects in the data and linear trend, compute the estimates of quarterly sales for year 6.a. Report the estimate…
Elon Corporation manufactures parts for an aircraft com-pany. It uses a computerized numerical controlled (CNC) machining center to produce a specific part that has adesign (nominal) target of 1.275 inches with tolerancesof 0.024 inch. The CNC process that manufacturesthese parts has a mean of 1.281 inches and a standarddeviation of 0.008 inch. Compute the process capabilityratio and process capability index, and comment onthe overall capability of the process to meet the designspecifications.
The managing director of a consulting group has the accompanying monthly data on total overhead costs and professional labor hours to bill to clients. Complete parts a through c. Overhead Cost Billable Hours $ 365,000.00 3000 $ 400,000.00 4000 $ 430,000.00 5000 $ 477,000.00 6000 $ 560,000.00 7000 $ 587,000.00 8000 a) Develop a trendline to identify the relationship between billable hours and overhead costs. b) Interpret the coefficients of your regression model. Specifically, what does the fixed component of the model mean to the consulting firm? c) If a special job requiring 1000 billable hours that would contribute a margin of $38,000 before overhead was available, would the job be attractive?