Management of a soft-drink company wants to develop a method for allocating deli
ID: 3218977 • Letter: M
Question
Management of a soft-drink company wants to develop a method for allocating delivery costs to customers. Although one cost clearly relates to travel time withing a particular route, another variable cost reflects the time required to unload the cases of soft drink at the delivery point. A sample of 20 deliveries within a territory was selected. The delivery times and the number of cases delivered were recorder and provided:
Customer Number of cases Delivery Time 1 52 32.1 2 64 34.8 3 73 36.2 4 85 37.8 5 95 37.8 6 103 39.7 7 116 38.5 8 121 41.9 9 143 44.2 10 157 47.1 11 161 43 12 184 49.4 13 202 57.2 14 218 56.8 15 243 60.6 16 254 61.2 17 267 58.2 18 275 63.1 19 287 65.6 20 298 67.3 luence interval fo price of 2,000 square-foot h edicted Price Y 317.85 ($1,000s) 1 (xp -X) 317.8 The confidence interval endpoints are 2 or from $280,660 $354,900 Prentice-Hall Inc.Explanation / Answer
Customer
Number of cases
Delivery Time
1
52
32.1
2
64
34.8
3
73
36.2
4
85
37.8
5
95
37.8
6
103
39.7
7
116
38.5
8
121
41.9
9
143
44.2
10
157
47.1
11
161
43
12
184
49.4
13
202
57.2
14
218
56.8
15
243
60.6
16
254
61.2
17
267
58.2
18
275
63.1
19
287
65.6
20
298
67.3
SUMMARY OUTPUT
Regression Statistics
Multiple R
0.985774
R Square
0.971751
Adjusted R Square
0.970182
Standard Error
1.986503
Observations
20
ANOVA
df
SS
MS
F
Significance F
Regression
1
2443.466
2443.466
619.1956
2.15E-15
Residual
18
71.03149
3.946194
Total
19
2514.498
Coefficients
Standard Error
t Stat
P-value
Lower 95%
Upper 95%
Intercept
24.83453
1.054219
23.55729
5.61E-15
22.6197
27.04936
Number of cases
0.140026
0.005627
24.88364
2.15E-15
0.128204
0.151849
y=24.83+0.14(No of cases)
=24.83+0.14(150)
=45.83
Putting in the values in the formula we get the below:-
LCL=45.83-4.17=41.66
UCL=45.83+4.17=50
Customer
Number of cases
Delivery Time
1
52
32.1
2
64
34.8
3
73
36.2
4
85
37.8
5
95
37.8
6
103
39.7
7
116
38.5
8
121
41.9
9
143
44.2
10
157
47.1
11
161
43
12
184
49.4
13
202
57.2
14
218
56.8
15
243
60.6
16
254
61.2
17
267
58.2
18
275
63.1
19
287
65.6
20
298
67.3
SUMMARY OUTPUT
Regression Statistics
Multiple R
0.985774
R Square
0.971751
Adjusted R Square
0.970182
Standard Error
1.986503
Observations
20
ANOVA
df
SS
MS
F
Significance F
Regression
1
2443.466
2443.466
619.1956
2.15E-15
Residual
18
71.03149
3.946194
Total
19
2514.498
Coefficients
Standard Error
t Stat
P-value
Lower 95%
Upper 95%
Intercept
24.83453
1.054219
23.55729
5.61E-15
22.6197
27.04936
Number of cases
0.140026
0.005627
24.88364
2.15E-15
0.128204
0.151849
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