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Davis Stores sells clothing in 15 stores located around the southwestern United States. The managers at Davis are considering expanding by opening new stores
Davis Stores sells clothing in 15 stores located around the southwestern United States. The managers at Davis are considering expanding by opening new stores and are interested in estimating costs in potential new locations. They believe that costs are driven in large part by store volume measured by revenue. During a discussion, one of the managers suggests that number of employees might be better at explaining cost than store revenues. As a result of that suggestion, managers collected the following information from last year's operations (revenues and costs in thousands of dollars): Store 101 Costs Employees Revenues $2,323 40 $5,881 102 1,926 25 4,424 103 2,941 28 6,983 104 2,728. 37 6,937 105 2,497 49 5,322 106 5,206 50 3,339 107 2,924 44 4,807 108 3,168 40 2,829 109 2,775 28 4,709 110 5,917 57 4,640 111 2,452 32 3,806 112 3,128 28 5,005 113 3,282 37 3,298 114 4,880 42 4,910 115 5,157 54 4,889
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