A bank’s economist has been interested in developing a production function for the bank. The model recognizes three explanatory variables, which are measures of resources available to the bank. These are Labor Hours, Operating Expenses, and Capital Expenses. The response variable, which measures output activity, is a weighted average of the transactions processed by all departments in the course of a month. The economist’s model takes the form:

Q=a0x1a1x2a2x3a3

Because the fitted curve is a production function, it represents the ideal output level that could be achieved for any choice of inputs. Thus, the notion is to fit the model to actual data as well as possible, subject to the requirement that the predicted value be at least as large as the observed value for each combination of inputs in the data set.

Required

What are the best-fitting values of a0, a1, a2, and a3

Using the model determined in part (a), what ideal output is predicted for Branch 2? for Branch 4?

Branch	Labor Hours	Operating Expenses	Capital Expenses	Output
1	34515	6543	591	289130
2	49960	11830	550	506808
3	20652	3464	427	143653
4	49024	7603	478	385421
5	36923	8723	830	253525
6	28967	4606	474	219992
7	28452	7425	182	193284
8	45911	8013	790	257253
9	26890	14662	447	173266
10	47376	7576	764	326752
11	57913	12035	875	478533
12	43477	7255	1109	337643
13	49786	10909	405	244127
14	30045	4264	479	139447
15	56579	8895	840	380206
16	43824	12690	801	178769
17	33823	4143	381	216168