COMM 2020 Chapter Notes - Chapter 8: Squared Deviations From The Mean
19 Apr 2016
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Chapter 8: step 1: define the cost object to be estimated. Depending on what the data look like, there may be a non-linear relationship: step 5: select and employ the estimation method. 2 methods: high-low and regression (regression won"t be on exam: step 6: assess the accuracy of the cost estimate. Now the hours matter more, b/c for every hour we incur now, 93 cents for every maintenance hour is incurred: y=a+bx 3005=a+(. 93)(1880) a=1265. 8-31: regression minimize the sum of squared deviations, you"d pick regression 1 because: 8-42: change in y/change in x = (4470-2820)/(520/300) = 7. 50, y=a+bx 4470=a-(7. 5)(520) a=570. 8-46: predicted cost at 400 hours is 3600, confidence range=3600+/-34. 469 (standard error)
