Using HP 17bII+ for Cost Estimation with Linear Regression
Johnson’s Chair Company has experienced the following costs for the first 6 months of the year: | |
# Chairs Made 5,000 5,500 4,800 5,300 4,950 5,150 |
Total
Costs $120,000 $122,100 $118,540 $122,400 $119,100 $124,200 |
Entering data in HP 17bII+:
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[Shift] [CLR DATA]
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Press top soft key {SUM}
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5,000 [INPUT]
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5,500 [INPUT]
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4,800 [INPUT]
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5,300 [INPUT]
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4,950 [INPUT]
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5,150 [INPUT]
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[EXIT]
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Press top soft key {NAME}
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Press top soft key {ABCDE}{C}
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Press top soft key {FGHI}{H}
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Press top soft key {FGHI}{I}
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Press top soft key {RSTUV}{R}
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Press top soft key {RSTUV}{S}
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[INPUT]
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Press top soft key {GET}{*NEW}
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120,000 [INPUT]
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122,100 [INPUT]
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118,540 [INPUT]
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122,400 [INPUT]
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119,100 [INPUT]
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124,200 [INPUT]
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[EXIT]
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Press top soft key {NAME}
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Press top soft key {RSTUV}{T}
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Press top soft key {ABCDE}{C}
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[INPUT]
Johnson’s fixed cost:
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Press [SHIFT][MAIN]
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Press top soft key {SUM} {CALC} {MORE} {FRCST}
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Prompted ‘Select X Variable’
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Press top soft key {CHAIRS}
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Prompted ‘Select Y Variable’
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Press top soft key {TC}
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Displayed ‘LINEAR’
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Press top soft key {B} is Y intersect, this is fixed cost - when no chair was build.{M} is the unit cost
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Display 89,449.381 is the Answer
Johnson�s variable cost:
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Press top soft key {M}
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Display 6.178 which is the cost for one unit of chair.
How good is the fit of the linear regression line generated?
- Press top soft key {CORR} Display 0.716 this is the answer
Total costs for 5,400 chairs:
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Enter 5,400 then press {CHAIRS}
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Display 122,806.907 is the Answer.
Total costs were $125,000, how many chairs:
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Enter 125,000 then press {TC}
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Display 5,755.023 is the Answer.
This solution is also applicable to HP 17bII and HP 19bII Financial Calculator.