For each of the following situations tell whether the pre- dicted value or the r
ID: 3312452 • Letter: F
Question
For each of the following situations tell whether the pre- dicted value or the residual would be most useful a. For budgeting purposes you need to know what number to place under "cost of goods sold" based on the expected sales figure for the next quarter b. You would like to see how your divisions are per- forming after adjusting for how well you expect them to do given the resources they consume. To help you set the salary of a new employee, you want to know a reasonable pay figure for a person with the same experience. As part of a payroll policy analysis report, you wish to show how much more (or less) each employee is paid compared to the expected salary for a person with the same experience. c. d.Explanation / Answer
For situations a) and c) the predicted value is most useful, because
a) here we predict for the next quarter the number to place under "cost of goods sold" based on the expected sales. they gives a sales detailed.
c) We here set a salary of new emplyee, bye using data of previous same experience persons salary.
For situations b) and d) the residual is most useful, Because
b)Here we compute residual for given data to check our decision which are performing after adjustment.
d) Here also we compute residual to show how much more/less each employee is paid compared to the expected salary for a person with the same experiences.
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