BUS308 Business Statistics
Instructor: Glenn Daniels
Gas Prices and our Company’s Future
Gas prices have been steadily rising for more than six years, and have never been higher this time of the year according to Chris Kahn, of the Associated Press. (yahoonews.com) and this is a significant concern for our delivery company. The more gas that is used, the higher the price due to supply and demand. The supply of oil (from which gasoline is derived) is a limited commodity, which is deteriorating at an alarming rate, while demand continues to accelerate at an equally alarming rate. Should gas reserves become depleted our delivery company, and others like it could essentially face bankruptcy. This project pertains to the future of gas prices and the sustainability of our delivery company. It is vitally important that this company remain aware of the cost that gas could possibly attain, in order for us as, as a team, to prepare for our future. According to reports from the U.S. Energy Information Administration, gas prices will continue to rise throughout 2012 and beyond. (us_energy_information_administ.) A statistical analysis was completed using data from the 1980’s – 2011, concerning average gasoline prices depicted on a month – month basis. A graph was created with x- axis representing the years and the y- axis representing price. Calculation of the mean yearly value/gas price was then conducted. The year 1982 was represented by a time-point value of (1) and 2020 was represented by the time –point value of (39). 39 (2020 -1982) y = 3.069 +0.627 * (1) 39 = 3.188. *x is the estimated cost of gas in the year 2020. The residual for each of the years was calculated via usage of the following equation. Based on the linear regression line equation, the predicted y was subtracted from the actual values of y- thus...