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The materials handling manager of a manufacturing company is trying to forecast the cost of maintenance for the company's fleet of over-the-road tractors. The manager believes that the cost of maintaining the tractors increases with their age. The following data was collected.
Age (years) / Yearly Maintenance Cost ($) / Age (years) / Yearly Maintenance Cost ($)
4.5 / 619 / 5.0 / 1194 4.5 / 1049 / 0.5 / 163 4.5 / 1033 / 0.5 / 182 4.0 / 495 / 6.0 / 764 4.0 / 723 / 6.0 / 1373 4.0 / 681 / 1.0 / 978 5.0 / 890 / 1.0 / 466 5.0 / 1522 / 1.0 / 549 5.5 / 987
a. Use Excel's least squares-linear regression module to develop a relationship to forecast the yearly maintenance cost based on the age of a tractor.
b. If a section has 20 three-year-old tractors, what is the forecast for the annual maintenance cost?
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