Question

This week’s homework is to be completed using Minitab. For a quick review on time series analysis commands in Minitab, click  here

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 8 years.

Year	Cost/Unit ($)
1	20.0
2	24.5
3	28.2
4	27.5
5	26.6
6	30.0
7	31.0
8	36.0

Instructions:

1. Input the data into Minitab
2. Create a time series plot and use it to describe the pattern that exists in the data.
3. Create a trend analysis plot
4. What is the fitted trend equation?
5. What is the average cost increase that the firm has been experiencing per year?
6. Compute an estimate of the cost/unit for next year (year 9)

Answer 1

Time series plot :

It has a trend pattern that exists in the data.

Trend analysis plot:

The average cost increase that the firm has been experiencing per year is 1.774

If Xt = 9

Yt = 19.99 + 1.774 * 9 = 35.956