Page 47 - BA2 Integrated Workbook - Student 2017
P. 47
Analysing and predicting costs
Regression analysis
4.1 Regression calculations
Regression analysis finds the line of best fit computationally rather than by estimating
the line on a scatter diagram.
n∑xy – (∑x)(∑y)
b = ——————— a = y ̅ − b x ̅
n∑x – (∑x)
2
2
where n = number of observations
x and y are the arithmetic mean (or average) of x and y and are calculated as:
̅
̅
∑x ∑y
x ̅ = —— y ̅ = ——
n n
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