You have been presented with the following cost data and asked to fit a statistical cost function.
Quantity:10, 20, 30, 40, 50, 60, 70, 80, 90, 100 and Total Cost: 104, 107, 109, 111.5, 114.5, 118, 123, 128.5, 137, 150 respectably. ( couldn’t make a column or chart to show the numbers together, example quantity of 10 goes with total cost of 104 and so on )
Question 1: fit three possible statistical cost functions to the data. Use straight-line, quadratic, and cubic formulas.
Question 2: discuss the statistical results you obtained in question 1. Include in your discussion R^2 , the coefficients, and the statistical significance of the coefficients. For the statistical significance test, use the p-test rather than the t-test.
Question 3: If the data represent 10 months of production for one plant of a specific company, would you consider this to be a short-run analysis?
Question 4: how would you answer to question 3 change if you were told that the data represent 10 different plants during a particular month of the year?