Suppose you are given a set of data for output at a company which manufactures detergents over a period of time. You have determined a relation between total operating cost and the quantity produced...

Suppose you are given a set of data for output at a company which manufactures detergents over a period of time. You have determined a relation between total operating cost and the quantity produced and is given by the linear regression model as follows:

TC=20,000+2,500Q, where TC=Total Operating Cost (in K) per annum and Q = Quantity produced per annum

Required:

1. Determine the total operating cost in the event that quantity of production is at 4,500, 12,500 and 7,000units.

1. What do you think would be your reservations in relaying on the linear regression model for budgetary planning purposes?