Write the cost formula for delivery cost

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Reference no: EM13939491

METHOD OF LEAST SQUARES USING COMPUTER SPREADSHEET PROGRAM

Susan Lewis, owner of a florist shop, is interested in predicting the cost of delivering flo- ral arrangements. She collected monthly data on the number of deliveries and the total monthly delivery cost (depreciation on the van, wages of the driver, and fuel) for the past year.

Month	Number of Deliveries	Delivery Cost ($)
January	100	1,200
February	550	1,800
March	85	1,100
April	115	1,050
May	160	1,190
June	590	1,980
July	500	1,800
August	520	1,700
September	100	1,100
October	200	1,275
November	260	1,400
December	450	2,200

Required:

1. Using a computer spreadsheet program such as Excel, run a regression on these data. Print out your results.

2. Using your results from Requirement 1, write the cost formula for delivery cost. (You may round the fixed cost to the nearest dollar and the variable rate to the nearest cent.)

3. What is R2 based on your results? Do you think that the number of direct labor hours is a good predictor of delivery cost?

4. Using the cost formula in Requirement 2, what would predicted delivery cost be for a month with 300 deliveries?

Reference no: EM13939491

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