Chips:
A start-up company has developed an improved electronic chip for use in laboratory equipment. The company needs to project the manufacturing cost, so it develops a spreadsheet model that takes into account the purchase of production equipment, overhead, raw materials, depreciation, maintenance, and other business costs.
The spreadsheet estimates the cost of producing 10,000 to 200,000 chips per year, as seen in the table. Develop a regression model to predict Costs based on the Level of production.
| Chips Produced (1000s) |
Cost per Chip ($) |
| 10 |
146.1 |
| 20 |
105.8 |
| 30 |
85.75 |
| 40 |
77.02 |
| 50 |
66.1 |
| 60 |
63.92 |
| 70 |
58.8 |
| 80 |
50.91 |
| 90 |
47.22 |
| 100 |
44.31 |
| 120 |
42.88 |
| 140 |
39.05 |
| 160 |
37.47 |
| 180 |
35.09 |
| 200 |
34.04 |