Assume the following data (where the xxx is the last three digits of your panther id):
| Month |
Machine Hours (hrs.) |
Maintenance Costs ($) |
| 1 |
1,330 |
102,xxx |
| 2 |
1,400 |
103,xxx |
| 3 |
1,500 |
108,xxx |
| 4 |
1,470 |
108,xxx |
| 5 |
1,620 |
116,xxx |
| 6 |
1,690 |
115,xxx |
| 7 |
1,490 |
107,xxx |
| 8 |
1,310 |
102,xxx |
| 9 |
1,450 |
106,xxx |
| 10 |
1,580 |
113,xxx |
| 11 |
1,300 |
100,xxx |
| 12 |
1,600 |
113,xxx |
| 13 |
1,650 |
114,xxx |
| 14 |
1,440 |
109,xxx |
| 15 |
1,340 |
102,xxx |
| 16 |
1,670 |
114,xxx |
| 17 |
1,480 |
106,xxx |
| 18 |
1,360 |
103,xxx |
| 19 |
1,340 |
103,xxx |
| 20 |
1,540 |
112,xxx |
For example, if your panther id is 1234567, then your maintenance costs would be $102,567 in month 1, $103,567 is month 2, $113, 567 in months 10, 12. and 13.
Assume that the following relationship holds:
Maintenance Costs = a + (b * Machine Hours)
REQUIRED
Estimate the values of a and b, 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.
Make sure to report
a. the values of a and b;
b. a scatter plot of the data points, and
c. the adjusted R-square