(Q.5) Lauric Daley is examining customer-service costs in the southern region of Capitol Products. Capitol Products has more than 200 separate electrical products that are sold with a six-month guarantee of full repair or replacement with a new product. When a product is returned by a customer, a service report is prepared. This service report includes details of the problem and the time and cost of resolving the problem. Weekly data for the most recent 8-week period are as follows: Customer-Service Department Costs Week 1 2 4 6 Customer-Service Department Costs $20,000 Questions: 1. Plot the relationship between customer-service costs and number of service reports. Is the relationship economically plausible (reasonable, acceptable)? $25,000 $15,000 $10,000 $5,000 $0 0 Write cost function: Calculate intercept (constant): $13,700 20,900 13,000 18,800 14.000 100 21,500 16,900 21,000 200 300 Number of Service Reports 190 275 115 395 265 455 340 305 400 Number of Service Reports 2. Using the high-low method compute cost function, relating customer-service costs to the number of service reports Calculate slope coefficient: 500
(Q.5) Lauric Daley is examining customer-service costs in the southern region of Capitol Products. Capitol Products has more than 200 separate electrical products that are sold with a six-month guarantee of full repair or replacement with a new product. When a product is returned by a customer, a service report is prepared. This service report includes details of the problem and the time and cost of resolving the problem. Weekly data for the most recent 8-week period are as follows: Customer-Service Department Costs Week 1 2 4 6 Customer-Service Department Costs $20,000 Questions: 1. Plot the relationship between customer-service costs and number of service reports. Is the relationship economically plausible (reasonable, acceptable)? $25,000 $15,000 $10,000 $5,000 $0 0 Write cost function: Calculate intercept (constant): $13,700 20,900 13,000 18,800 14.000 100 21,500 16,900 21,000 200 300 Number of Service Reports 190 275 115 395 265 455 340 305 400 Number of Service Reports 2. Using the high-low method compute cost function, relating customer-service costs to the number of service reports Calculate slope coefficient: 500
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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