In: Operations Management
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Assume that the following relationship holds:
Maintenance Costs = (v * Machine Hours) + f
REQUIRED
Estimate the values of v and f and the cost equation, using,
1. the High-Low Method, and
2. the Linear Regression method.
Note, to use the linear regression method, you MUST use the Microsoft Excel program. Please follow the instructions on P.329 of the textbook; DIRECTIONS FOR ADD-Ins: Data Analysis Toolpak.
Make sure to report
1. the values of v and f;
2. a scatter plot of the data points, and
3. the adjusted R-square; explain what the adjusted R-square means.
4. The cost equation in the form of Y = vx + f, substituting the values for v and f from the regression output.
YOUR SUBMISSION MUST BE IN EXCEL. PLEASE INCLUDE AN EXCEL ATTACHMENT OR HYPERLINK! ONE WORKBOOK, WITH A WORKSHEET FOR EACH ANALYSIS (i.e., High-Low Method and Regression Analysis respectively).