How to solve (a) & (b)?(a) will need to compute 3 simple linear regression equation.(b) what to compare in the regression to derive the most appropriate cost driver? Water Pursuits operates a chain of 10 retail surf and water sport apparel stores inWestern Australia. Each store makes its own purchasing decisions. Vijay Krishnan,Chief Operating Officer of Water Pursuits, is interested in better understanding thedrivers of the Purchasing Departments costs. For many years, the PurchasingDepartments' costs have been allocated to products on the basis of the dollar valueof merchandise purchased.Vijay recently attended a training seminar conducted by Retail Traders Associationof WA and CPA Australia, titled "Cost Drivers in the Retail Industry". In apresentation at the seminar, Top Hat Clothiers, a high fashion retailer that hasimplemented activity-based costing, reported number of purchase orders andnumber of suppliers to be the two most important cost drivers of PurchasingDepartment costs. The dollar value of merchandise purchased in each purchaseorder was not found to be a significant cost driver.Enthralled, Vijay interviewed several members of the Purchasing Department at theWater Pursuits store in Fremantle. They believed that Top Hat's conclusions alsoapplied to their Purchasing Department.Vijay collected the following data for the most recent year for Water Pursuits' 10retail stores:PurchasingDepartmentCostsDollar Value ofNumber ofNumberDepartmentStoremerchandisepurchaseordersofpurchased$suppliers132$ 1,523,000$ 1,100,000$298,315,000173,456,00081,160,0004,4574,5502,3335,944AlbanyMargaret River122Mandurah547,00068$ 2,049,000$ 1,056,0002$Fremantle$219,566,000$255163,505,000129,854,000352,875,000$Esperance4,196113529,000$ 1,538,000$ 1,754,000$ 1,612,000$ 1,257,000Broome652,1275,2864,0814,7074,331Mindarie104Jurien Bay238,674,000$195239,312,000$Geraldton144Exmouth180,944,000133REQUIRED:Using EXCEL, estimate the simple regression equation for (i) Dollar Value ofMerchandise Purchased, (ii) Number of Purchase Orders and (iii) Number ofSuppliers.а.b.From your resultsand explain your answer by referencing the appropriate statistical outputs.determine which is the most appropriate cost driver

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MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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