Referring to the table in the attached table, consider that hiring a driver costs $10 while each machine costs $100. Which method should he use and why?
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It is given that, hiring a driver costs $10 and each machine costs $100.The trucker needs to base his decision on the most cost efficient method.
The total cost corresponding ...
The solution illustrate the method of cost optimization for making decisions.
Regression Optimization to Determine Price
1. You decide to buy'a diamond ring. To make sure you get a quality ring for your money, you educate yourself on things to look for in buying a diamond. After some research on the web, you learn about the 4C's of diamonds: cut, clarity, color and carat. You decide the ring you want to purchase will have a a round-cut diamond and you narrow your search for various ring with that cut.
After searching the Internet, you come up with a set of possible rings for purchase. But you have also learned, pricing can vary considerably with diamond purchases. Not wanting to be ripped off, you remember 0S4680 and decide to do a regression analysis to develop a model to predict what a good retail price of a round cut diamond ring should be.
a. Utilizing the data you collect (Tab Diamond Ring Data Set), prepare scatter plots for each of the independent variables to determine what type of relationship exists in predicting the price of the ring.
b. Continue with your analysis and determine which combination of . independent variables you would use to predict the cost of the ring. Which would you use and why?
c. If you decided to use just Clarity and Carat, what would be the regression model equation?
d. Using the Regression equation from part c, create an estimated price for each ring within your data set. Are there any rings which are overpriced? Are there any which appear to be bargains? Based on your analysis, which ring would you buy?