ADM 3346 Lecture Notes - Lecture 2: Variable Cost, Fixed Cost, Ordinary Least Squares

• School: University of Ottawa
• Department: Administration
• Course: ADM 3346
• Professor: Tiemei L I

Document Summary

Understand the various methods of cost estimation and use historical data to predict future costs. Use standard mathematical notation to specify a cost function that can be graphed as a straight line. Apply ols linear regression to analyze goodness of fit and the values of a and b to predict the moh cost pool. Can be time-consuming and costly: conference method. Uses analysis and opinions gathered from various departments of an organization. Can cause paralysis by analysis : account analysis method. May be distortions due to the time lag between incurring a cost and receiving benefits: quantitative analyses. Uses only the highest and lowest observed values. Regression analysis is a statistical method that measures the relationship among sets of recorded data. It identifies a linear relationship a straight line. Ordinary least squares (ols) method depends on correlation, an orderly association of changes, not causality.