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Answer the following questions:
1. Develop a linear-regression-based forecasting model to predict costs. (What is the linear regression equation?)
2. Predict costs when patient days are 520, 530, 540 and 550.
3. What would be predicted costs for March of year 3 (eighteenth month), using a four-period moving average?
A hospital pharmacy would like to develop a budget for allergy medications that is based on patient days. Cost and patient days data were collected over a 17-month period. Data are shown as below:
Period
Cost ($)
Patient Days
Year 1, October
32996
516
Year 1, November
34242
530
Year 1, December
27825
528
Year 2, January
29807
517
Year 2, February
28692
500
Year 2, March
34449
514
Year 2, April
33335
515
Year 2, May
38217
509
Year 2, June
36690
524
Year 2, July
35303
Year 2, August
33780
539
Year 2, September
32843
551
Year 2, October
37781
543
Year 2, November
27761
Year 2, December
31876
531
Year 3, January
31463
542
Year 3, February
29829
558
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