(solution) Firm Chair Company manufactures customized wood furniture and

(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