Following Are the Results from Two Different Simple Regression Analyses

question 110

Essay

Following are the results from two different simple regression analyses, estimating the costs of the purchasing department using number of purchase orders and number of vendors as potential cost drivers.

a)Which independent variable explains more of the variation in purchasing costs? Explain your choice.
b)Choose the most appropriate cost driver and write the cost function.
c)For an upcoming month, the number of vendors is estimated to be 150, while the number of purchase orders is estimated to be 340. Using the most appropriate cost driver, estimate the total cost for that month.
d)List several uncertainties that could affect the accuracy of the cost function in estimating the cost for the upcoming month.

Understand the role of substitutes and the broadness of market definition on elasticity.

Appreciate the theoretical underpinnings of supply and demand through the lens of elasticity.

Understand the concept of price elasticity of demand and how to calculate it.

Distinguish between elastic, inelastic, and unitary elasticity of demand.

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Definitions:

Absolute Value

The distance of a number from zero on the number line, regardless of direction; denoted by |x|.

Equation

A mathematical declaration that affirms two expressions, usually containing variables, are equal.

Inequality

A mathematical statement that indicates the relationship of less than, greater than, less than or equal to, or greater than or equal to between two values.

Solve

To find the solution or answer to a problem or equation.