3) The total expenses of a hospital is determined by many different factors but two of...

3) The total expenses of a hospital is determined by many different factors but two of these factors are the number of beds and the number of patients that are admitted to the hospital. Data was collected on 14 hospitals and is listed in the table.

Hospital	Number of beds	Admissions (1,000s)	Total expenses ($1,000,000
1	215	77	57
2	336	160	127
3	520	230	157
4	135	43	24
5	35	9	14
6	210	155	93
7	140	53	45
8	90	6	6
9	410	159	99
10	50	18	12
11	65	16	11
12	42	29	15
13	110	28	21
14	305	98	63

a) Develop a model using the number of beds to predict the total expenses of a hospital. How well does the model fit the data?

b) Develop a model using the number of admissions to predict the total expenses of a hospital. How well does the model fit the data?

c) Develop a model using the number of beds and admissions to predict the total expenses of a hospital. How well does the model fit the data?

d) Do you think that both variables (number of beds and admissions) should be included in our prediction model? Why or Why not?

Expert Solution

orchestra answered 2 years ago

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