Consolidated Western Wear Retailers: Regression Analysis to Understand Cost Drivers Memo

Please read the attachments carefully and write a two-page memo (plus attachments) outlining your analytical findings as well as recommendations. Use the following requirements as a guide: 

1. Prepare a statistical analysis of the costs provided.

a. Plot the purchase department cost vs. each cost driver (include these at the end of the memo as an attachment, one graph per page). 

b. Analyze the data for potential problems, correct data problems if necessary, and report any changes made. 

c. Use regression analysis to develop cost models for all potential cost drivers.

d. Identify the best model, and explain why. 

e. Explain what the model means from an economic perspective.

2. Use the model to make two recommendations to the CWWR management team for improving the efficiency of purchasing operations. 

a. Be specific with details of the recommendations. 

b. Estimate the cost savings from the implementation of your recommendations.

c. Consider secondary implications, quantitative and/or qualitative. 

d. Indicate how these changes (recommendations) should be implemented.

You will be using Excel to complete single and multiple regression models.  

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