Scenario:

You are a team of management consultants who are helping to set up a cost estimation model for the

machine maintenance department of a manufacturing company. The management team of the company

has provided you with a dataset containing the cost of the department in the last $12$ months. The dataset

also contains the number of machine hours, the number of maintenances performed, and the number of

software updates for each month. The management team believes that these three factors are the cost

drivers of the total costs.

Requirements:

Please conduct a multiple regression analysis in excel and answer the following questions:

What is the cost estimation model for the machine maintenance department. Please clearly state

the cost estimation model in the format $TC=FC+V{C}^{**}x.$

Out of the three factors that the management team provided, which one is the cost driver for the

department costs, which one is not? Explain your answers with the statistics provided by the

regression results.

How much is the R$-$square? What can you interpret from the R$-$square statistics?