Question

Please circle answers

The president of a small manufacturing firm is concerned about the continual increase in manufacturing costs over the past several years. The following figures provide a time series of the cost per unit for the firm's leading product over the past eight years.

Click on the datafile logo to reference the data.

Year	Cost/Unit ($)		Year	Cost/Unit ($)
1	20.00		5	26.60
2	24.50		6	30.00
3	28.20		7	31.00
4	27.50		8	36.00

(b)	Use simple linear regression analysis to find the parameters for the line that minimizes MSE for this time series.
	If required, round your answers to two decimal places.
	y-intercept, b0 =
	Slope, b1 =
	MSE =
(c)	What is the average cost increase that the firm has been realizing per year?
	Round your interim computations and final answer to two decimal places.
	$
(d)	Compute an estimate of the cost/unit for next year.
	If required, round your answer to two decimal places.
	$

Answer 1

b)

y intecept bo =19.99

slope b1 =1.77

SSE =Syy-(Sxy)2/Sxx=

23.346

MSE =SSE/n =2.92

c) average cost increase that the firm has been realizing per year =slope =1.77

d)

predicted value=19.993+9*1.774=

35.96