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Purchasing policy decisions fashio n flair could set

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Unformatted text preview: personnel at the Miami store believe MP$ is not a significant cost driver. Regression 2 PDC = a + (b ´ # of POs) Economically plausible. The higher the number of purchase orders, the more tasks undertaken. Regression 3 PDC = a + (b ´ # of Ss) Economically plausible. Increasing the number of suppliers increases the costs of certifying vendors and managing the Fashio n Flair­ supplier relat ionship. 2. Goodness of fit r2 = 0.08. Poor goodness of fit. 3. Significance of t­value on MP$ of Independent 0.84 is insignificant. Variables r2 = 0.42. Reasonable goodness of fit. r2 = 0.39. Reasonable goodness of fit. t­value on # of POs of 2.43 t­value on # of Ss of 2.28 is significant. is significant. 4. Specificat ion Analys is A. Linearit y Appears questionable Appears reasonable. within the but no strong evidence relevant range against linearit y. B. Constant variance of residuals Appears questionable, Appears reasonable. but no strong evidence against constant variance. Durbin­Watson Statist ic = 2.41 Assumpt ion of independence is not rejected. Durbin­Watson Statist ic = 1.98 Assumpt ion of independence is not rejected. Appears reasonable. Appears reasonable. C. Independence of residuals Durbin­Watson Statist ic = 1.97 Assumpt ion of independence is not rejected. Data base too small to make reliable inferences. D. Normalit y o f residuals Data base too small to Data base too small to make reliable make reliable inferences. inferences. 10­37 10­41 (30–40 min.) Purchasing Department cost drivers, multiple regression analysis (continuation of 10­40) (chapter appendix). The problem reports the exact t­values fro m the co mputer runs o f the data. Because the coefficients and standard errors given in the problem are rounded to three decimal places, dividing the coefficient by the standard error may yield slightly different t­values. 1. Regressio n 4 is a well­specified regressio n model: Economic plausibility: Both independent variables are plausible and are supported by the findings of the Couture Fabrics s...
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