Assignment:
Question 1. (High-low method) Wyoming Wholesale has gathered the following data on the number of shipments received and the cost of receiving reports for the ?rst seven weeks of 2010.
|
Number of
Shipments Received
|
Weekly Cost of
Receiving Reports
|
|
50
|
$175
|
|
44
|
162
|
|
40
|
154
|
|
35
|
142
|
|
53
|
185
|
|
58
|
200
|
|
60
|
202
|
a. Using the high-low method, develop the equation for predicting weekly receiving report costs based on the number of shipments received.
b. What is the predicted amount of receiving report costs for a week in which 72 shipments are received?
c. What are the concerns you have regarding your prediction from part (b)?