1. Perform a correlation analysis among the cost drivers. That is, you should compute the correlation between every pair of the cost driver. Identify the pairs of cost drivers that have an absolute value of correlation above 0.6. You can use the Excel function CORREL(arry1, array2) or use the menu Data->Data Analysis->Correlation Analysis to compute the correlation.

2. Perform a regression analysis with the price for the compressor be the dependent variables, and capacity, EER, and ln(volume) be the independent variable. You can use the Excel menu Data->Data Analysis->Regression to perform the analysis. Note that before running the regression, you should first take the natural log of the volume data because if you plot the price against the volume, you will find their relationship is not linear.

Part number | Price/ Unit Type Region Capacity BTU/Hr Weight EER* Unit Volume In(Volume) 110-1574 $ 34.49 Reciprocating North America 510 5.68 3.26 81,000 11 111-0810 39.48 Scroll Europe 920 10.51 4.90 37,000 12 1 16-7080 32.08 Reciprocating North America 720 8. 1 4.28 47,000 11 116-7532 29.47 Reciprocating Europe 285 3.31 5.03 82,000 11 122-7151 26.56 Reciprocating Europe 260 2.97 4. 16 66,000 11 126-1065 87.71 Scroll Europe 78 3.72 . 64 $9,000 11 128-9814 31.22 Reciprocating Europe 420 4.97 3.83 77,000 11 131-4060 31.81 Reciprocating North America 430 4.7 4.30 350,000 13 135-5677 41.31 Reciprocating Latin America 240 2.66 5.01 87,000 11 139-2202 31.97 Reciprocating North America 630 6.93 4.39 41,000 142-4903 37.83 Reciprocating Latin America 345 4.01 5.33 165,000 143-1644 34.41 Reciprocating Europe 600 6.74 4.22 34,000 147-4990 28.23 Scrol North America 825 9.6 3.09 750,000 156-7534 33.45 Reciprocating North Americ 290 3.44 3.73 65,000 157-4140 33.88 Reciprocating Latin America 350 3.85 4.49 23,000 62-5296 29.30 Reciprocating Europe 435 1.76 1.37 293,000 165-4522 36.77 Reciprocating Latin America 440 4.87 5.26 47,000 173-9008 37.07 Reciprocating Latin America 580 6.4 5.17 117,000 23 182-7808 39.33 Reciprocating Latin America 625 6.84 1.34 31,000 84-5143 30.01 Reciprocating Europe 230 2.54 5.03 2,000 25 186-4136 39. 15 Scrol North Americ 895 0.5 3.30 14,000 26 192-1143 40.73 Reciprocating Latin America 725 8.30 5.29 26,000 27 201-9244 43.78 Reciprocating Latin America 785 9.0 5.10 98,000 28 209-4727 26.68 Reciprocating Europe 120 1.3 4.37 1,000 29 223-0730 38.44 Reciprocating Latin America 330 3.90 4.93 2,000 30 234-4640 37.92 Reciprocating Latin America 405 4.80 4.49 34,000 31 235-595 30.56 Reciprocating North America 1030 11.96 3.45 220,000 32 237-8072 37.07 Reciprocating Europe 870 9.5 5.02 46,000 33 258-4726 30.85 Reciprocating North America 275 2.98 3.91 50,000 34 269-9744 32.95 Reciprocating Europe 700 8.30 1.04 358,000 35 297-7521 32.46 Scrol North America 090 12.77 3.80 65,000 36 306-4927 33.34 Reciprocating Europe 550 5.96 4.49 62,000 37 347-9507 34.39 Reciprocating Europe 385 4.4 4.47 47,000 38 376-3080 32.71 Reciprocating North America 280 3.18 4.4 49,000 395-0165 28. 14 Reciprocating Europe 245 2.91 4.68 230,000 448-4487 33.46 Reciprocating Europe 230 2. 65 1.66 39,000 475-5893 32.33 Reciprocating North America 355 3.91 4.06 65,000 509-1084 39.89 Scrol North America 930 0.4 3.02 47,000 577-9733 36.44 Scroll North Americ 850 9.73 3.70 69,000 601-0639 33.02 Reciprocating North America 405 4.42 3.86 5,000 656-1533 31.98 Scrol North America 770 3.35 3. 19 2,000 46 744-9083 31.66 Reciprocating North America 725 8. 17 4.40 41,000 47 759-6425 35.36 Reciprocating North America 465 5.0 4. 14 75,000 845-6688 30.72 Reciprocating North Americ 650 7.46 3.67 125,000 49 960-0588 32.98 Reciprocating North America 560 6.13 3. 18 62,000 50 51 Notes: 2 1) Type options: Recipricating or scroll 3 2) Regions: Europe, North America, South America, Asia 54 3) Unit Volume: annual unit purchases 65 4) EER: Energy Efficiency Rating 56