The director of surgery at a local hospital is interested in understanding his unit’s costs. An assistant collected data for the past 36 months on unit cost (labor, supplies, and so on) along with the number of procedures performed in the unit. The assistant analyzed the data using a spreadsheet program, and the following output was generated. Equation Intercept $ 1,006,000 Coefficient on procedures $ 230 Statistical data Correlation coefficient 0.518 R2 0.268 The unit is planning to perform an average 18,5000 procedures per month for the coming year. Required A: Use the regression output to write the surgical unit cost equation. Surgical unit cost = ____________ + __________ x Procedures Required B: Based on the cost equation, compute the estimated costs for the surgical unit per month for the coming year. Surgical unit costs ________________ Required C: The director of surgery has asked you for advice on whether he should rely on the estimate. The director of surgery has asked you for advice on whether he should rely on the estimate. ____ Yes ____ No
The director of surgery at a local hospital is interested in understanding his unit’s costs. An assistant collected data for the past 36 months on unit cost (labor, supplies, and so on) along with the number of procedures performed in the unit. The assistant analyzed the data using a spreadsheet program, and the following output was generated.
Equation
Intercept $ 1,006,000
Coefficient on procedures $ 230
Statistical data
R2 0.268
The unit is planning to perform an average 18,5000 procedures per month for the coming year.
Required A:
- Use the regression output to write the surgical unit cost equation.
Surgical unit cost = ____________ + __________ x Procedures
Required B:
- Based on the cost equation, compute the estimated costs for the surgical unit per month for the coming year.
Surgical unit costs ________________
Required C:
- The director of surgery has asked you for advice on whether he should rely on the estimate.
The director of surgery has asked you for advice on whether he should rely on the estimate.
____ Yes
____ No
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