Regression analysis
In this lesson, you'll learn how regression analysis reveals relationships between variables and helps you make forecasts—a key skill for strategic planning and cost prediction in your Performance Management studies.
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In this lesson
- 0:00 Regression analysis and variable relationships
- 0:35 Linear equation format and components
- 1:41 Calculating regression coefficients using formulas
- 2:32 Linear regression versus Hi-Lo analysis
- 3:04 Limitations of linear regression method
About this lesson
You'll explore the linear equation format (y = a + bx), understand what each component means, and discover how to calculate the regression line using the formulas provided in your exam. The video also covers the practical application of regression for predicting total costs at different output levels, and importantly, the limitations you need to recognise—such as assumptions about linear relationships, the reliability of historical data, and the need to stay within your original data range. By mastering regression analysis, you'll have a powerful tool for decision-making that goes beyond simpler methods like Hi-Lo analysis.
Duration: 4m
Transcript
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