(Solution) - The facility manager at a pharmaceutical company wants to build -(2025 Original AI-Free Solution)

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Academic Level: Undergrad. (yrs 3-4)

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The facility manager at a pharmaceutical company wants to build a regression model to forecast monthly electricity cost (Cost). Three main variables are thought to influence electricity cost:
(1) Average outdoor temperature (Temp),
(2) Working days per month (Days), and
(3) Tons of product produced (Tons). A portion of the past year's monthly data is shown in the accompanying table.

a. Estimate the linear model: Cost = ?0 + ?1 Temp + ?2 Days + ?3 Tons + ?. What is the predicted electricity cost in a month during which the average outdoor temperature is 65°, there are 23 working days, and 76 tons are produced?
b. Estimate the exponential model: ln(Cost) = ?0 + ?1 Temp + ?2 Days + ?3 Tons + ?. What is the predicted electricity cost in a month during which the average outdoor temperature is 65°, there are 23 working days, and 76 tons are produced?
c. Based on R2, which model provides the better fit?