The results of the regression analysis to estimate delivery costs are as follows Which of the following is an appropriate cost equation based on the above regression output? A) Delivery costs = $366.39 + $0.58 X₁,where X₁ is the number of cargos. B) Delivery costs = $0.662 + $2.985 X₁,where X₁ is the number of cargos. C) Delivery costs = $242.51 + $1.74 X₁,where X₁ is the number of cargos. D) Delivery costs = $48861.07 + $1.74 X₁,where X₁ is the number of cargos.

Question

Quizplus · Accepted Answer

The appropriate cost equation is the one that has a statistically significant coefficient for the independent variable (X₁) and a high adjusted R-squared value. In this case, option C has a statistically significant coefficient of 1.74 (p-value < 0.05) and a higher adjusted R-squared value of 0.836 compared to the other options. Therefore, the appropriate cost equation is Delivery costs = $242.51 + $1.74 X₁, where X₁ is the number of cargos.

The Results of the Regression Analysis to Estimate Delivery Costs