Cost Management 6th Edition by Edward Blocher,David Stout ,Paul Juras,Gary Cokins

Exercise 53

Cross-Sectional Regression; Analysis of Rankings; Spreadsheet Application Bloomberg Businessweek magazine periodically publishes a ranking of the Top Companies: Best Place to Work. The ranking gives employers, employees, and potential employees a snapshot of the overall achievements these companies have made in creating a productive and rewarding work environment. The ranking considers a number of factors (we will call these independent variables), including surveys of career service directors at U.S. colleges, surveys of the organizations themselves (on pay, benefits, and training programs, etc.), and surveys of undergraduate students. The survey data are used to create a ranking for each independent variable of the top companies. The 2009 rankings and survey data for the top 25 organizations are shown below.

Required
1. Using regression analysis in Excel, develop a regression model to predict company rank based on the four independent variables-employer survey rank, student survey rank, career service director rank, and average pay. Determine which, if any, of these four independent variables are significantly correlated with the overall ranking. Which is the strongest and which is the weakest independent variable, and why
2. What are some of the limitations of the analysis you have completed in part 1 above