Pauline Raphal, executive assistant to the principal of Ecole Suprieure des Mines de St Etienne, is concerned

Pauline Raphaël, executive assistant to the principal of Ecole Supérieure des Mines de St Etienne, is concerned about the overhead costs at her university. Cost pressures are severe, so controlling and reducing overheads is very important. Raphaël believes overhead costs incurred are generally a function of the number of different academic programmes (including different specialisations, degrees and research programmes) that the university has and the number of enrolled students.

Both have grown significantly over the years. She collects the following data:

She finds the following results for two separate simple regression models:

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Overhead Year costs ('000) Number of academic programmes Number of enrolled students 1234567890 13 500 29 3400 19 200 36 5000 16 800 49 2600 20 100 53 4700 19 500 54 3900 23 100 58 4900 23 700 88 5700 20 100 72 3900 22 800 83 3500 29 700 73 3700 11 31 200 101 5600 12 38 100 103 7600