An important product is cost sampled for significant compone

An important product is cost sampled for significant components and over the years a product index is faithfully calculated. The following is the table of indexes. (a) Determine the values of parameters a and b of the linear regression equation using the method of least squares. (b). Find the 95% prediction interval for the year-10 value (use 1.96). (d). The product cost for year 9 is $17,500 per unit. Find the expected cost for year 10. (d). Determine the coefficient of correlation, r. What can you say about the strength of the prediction of the cost range?

Solution