When a manager notices an outlier during the cost estimation process,the appropriate response is to:
A) No response is required,unless multiple outliers are observed.
B) Attempt to identify the reasons for the outlier.
C) Divide the outlier by the standard deviation,before including the outlier in the regression model.
D) Re-collect all the data,as an outlier indicates that the data has been corrupted.

Question

Quizplus · Accepted Answer

When an outlier is observed during the cost estimation process, it is important to attempt to identify the reasons for the outlier. This can provide important insights into any underlying issues or variables that may be impacting the cost estimates. By identifying and examining the outlier, managers can adjust their cost estimation processes accordingly and improve the accuracy of their estimates. Ignoring outliers or re-collecting all the data may not be necessary or effective solutions. Dividing the outlier by the standard deviation is also not an appropriate response, as this could skew the data and lead to inaccurate cost estimates.

When a Manager Notices an Outlier During the Cost Estimation