Question

(0.5) Laurie Daley is examining customer-service costs in the southern region of Capitol Products Capitol Products has more than 200 separate electrical products that are sold with a six-month guarantee of full repair or replacement with a new product. When a product is returned by a customer a service report is prepared. This service report includes details of the problem and the time and cos of resolving the problem. Weekly data for the most recent 8-week period are as follows: Week 0 au AWN- Customer-Service Department Costs $13,700 20,900 13,000 18.800 14,000 21,500 16,900 21,000 Number of Service Reports 190 275 115 395 265 455 340 305 Questions: 1. Plot the relationship between customer-service costs and number of service reports. Is the relationship economically plausible (reasonable, acceptable)? $25,000 $20,000 $15,000 Customer Service Department Costs $10,000 $5,000 + $0 0 100 200 300 400 500 Number of Service Reports 2. Using the high-low method compute cost function, relating customer-service costs to the number of service reports Calculate slope coefficient: Calculate intercept (constant): Write cost function: