Cost Forecast Modeling. John Carter, an intern at Medical Products, Inc., is evaluating the cost effectiveness of a training program in his department. Carter believes that the monthly rejection rate is inversely related to the hours spent each month on worker training.
A. Write an equation to predict next month's rejection rate using the symbols R = rejection rate, T = worker training, t = time, a0= constant term, a1 = regression slope coefficient, and assuming that the rejection rate in the forecast month decreases by twice the percentage increase in worker training during the preceding month.
B. If 40 hours were spent last month on worker training and this month's rejection rate was 60, what should the rejection rate be next month if worker training this month is 50 hours? Use the equation developed in part A..