## (solution) Firm Chair Company manufactures customized wood furniture and

Firm Chair Company manufactures customized wood furniture and sells the furniture in large quantities to major furniture retailers. Imagine that you have recently been assigned to analyze the company?s pricing policy. You have been told that quantity discounts were usually given. For example, for one type of chair, the pricing changed at quantities of 200 and 400 ? that is, these were the price breaks, where the marginal cost of the next chair changed. For this type of chair, the file ?FirmChair.xlsx? contains the quantity and total price to the customer for 81 orders. Use regression to discover the pricing structure that Firm Chair evidently used.

• (Note: A linear regression of Total Price versus Quantity will give you a ?decent? fit, but you can do much better by introducing appropriate variables into the regression.)

This isis fictitious

fictitious data.

data.

This Order

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34

35

36

37

38

39

40

41

42

43

44

45 Quantity Total Price

270

35746

310

39495

280

35518

310

43012

250

29306

160

22715

230

28768

270

34435

230

30085

270

35890

130

19238

260

33981

350

44688

130

19952

330

42478

230

30846

540

60176

210

26770

190

27907

210

25924

160

23625

320

40712

150

22455

180

26590

150

22916

160

24881

360

46604

160

24246

220

27874

250

33024

200

29647

130

19164

440

46810

180

27987

160

24904

180

27318

410

45428

280

36304

390

51396

150

23680

120

17163

130

19117

320

42115

130

18408

190

29253 The quantity

quantity breaks

breaks are

are

The

at 200

200and

and400.

400.

at 46

47

48

49

50

51

52

53

54

55

56

57

58

59

60

61

62

63

64

65

66

67

68

69

70

71

72

73

74

75

76

77

78

79

80

81 220

180

90

270

500

420

480

250

170

240

440

370

400

130

390

90

130

530

340

550

310

280

300

160

480

150

270

230

240

360

240

320

360

300

440

140 30552

28295

13230

34706

56097

47204

53185

32896

26183

31980

50069

47496

51804

17672

49889

14518

19008

60239

44112

60294

41815

37764

39587

26369

53732

21321

37110

30061

31763

45239

31199

42731

46379

39035

47790

22735

Solution details:

STATUS

QUALITY

Approved

Sep 13, 2020

EXPERT

Tutor