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Question:
The medical centre tender selection panel have provided you with some estimated figures of the number of emergency appointments, patients per day and the associated administrative costs for the first year of operation. Below is the summary of the years expected patients. It has been estimated that the clinics relevant range is 150 to 300 patients per day.
Month
Emergency appointments
Patients per day
Administrative costs ($)
January
30
350
2780
February
32
125
1400
March
20
100
1200
April
250
2000
May
34
325
2380
June
38
225
1840
July
26
275
2040
August
24
75
820
September
175
1880
October
300
2220
November
150
1660
December
42
375
3220
Required:
a) Identify the number of emergency appointments, patient load and administrative costs for each month within the relevant range
b) Construct an excel spreadsheet and create a regression analysis to estimate
i. An equation with patient per day predicting administrative cost within the relevant range
ii. An equation with both activities - patients per day, number of emergency appointments predicting administrative costs within the relevant range
c) Does the inclusion of an additional cost driver improve the model? Explain your answer
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