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Regression Analysis of Operating Expense and Staff Size

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In this study we will consider the current issues of operational expenses in relation to the number of staff and number of branches being experienced by 123 Finance Inc. With current company staff being split between eight separate branches located across the United States, it has been suggested that a means of reducing daily operational costs for the company may be through the consolidation of these various branches. In this way functions of the company that are currently divided can be combined into a reduced number of locations, potentially increasing productivity, whilst reducing daily expenditure.
The current division of 123 Finance Inc.'s staff numbers can be observed in this following chart:

Location Daily Operating Expense Head Count of Personnel
Dallas, TX $40,000 300
Phoenix, AZ $15,000 150
Kansas City, MO $15,000 150
Chicago, IL $38,000 275
Atlanta, GA $10,000 100
Tulsa, OK $17,500 180
Denver, CO $22,000 200
Sacramento, CA $35,000 225

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Solution Summary

Regression analysis of Daily Operating Expense and number of staff. The answer contains the calculation of Regression model, Slope, Intercept, Correlation, R Square and Coefficient of determination. Interpretations of the results are also given.

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Statistics, All Topics
Year 3
Regression analysis
Introduction
In this study we will consider the current issues of operational expenses in relation to the number of staff and number of branches being experienced by 123 Finance Inc. With current company staff being split between eight separate branches located across the United States, it has been suggested that a means of reducing daily operational costs for the company may be through the consolidation of these various branches. In this way functions of the company that are currently divided can be combined into a reduced number of locations, potentially increasing productivity, whilst reducing daily expenditure.
The current division of 123 Finance Inc.'s staff numbers can be observed in this following chart:
Location Daily Operating Expense Head Count of Personnel
Dallas, TX $40,000 300
Phoenix, AZ $15,000 150
Kansas City, MO $15,000 150
Chicago, IL $38,000 275
Atlanta, GA $10,000 100
Tulsa, OK $17,500 180
Denver, CO $22,000 200
Sacramento, CA $35,000 225
In order to successfully analyze and ...

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