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An air conditioning and heating repair firm conducted a study to determine if the average outside ...

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An air conditioning and heating repair firm conducted a study to determine if the average outside ...

An air conditioning and heating repair firm conducted a study to determine if the average outside temperature, thickness of the insulation, and age of the heating equipment could be used to predict the electric bill for a home during the winter months in Houston, Texas. The resulting regression equation was:

Y = 256.89 - 1.45X1 - 11.26X2 + 6.10X3, where Y = monthly cost, X1 = average temperature, X2 = insulation thickness, and X3 = age of heating equipment

(a) If December has an average temperature of 45 degrees and the heater is 2 years old with insulation that is 6 inches thick, what is the forecasted monthly electric bill?
(b) If January has an average temperature of 40 degrees and the heating equipment is 12 years old with insulation that is 2 inches thick, what is the forecasted monthly electric bill?

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Quantitative Analysis for Management

Edition: 12^th

Authors: Render, Stair, Hanna, Hale

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