Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins

Exercise 14

What does the coefficient of determination (R-squared) measure?

Step 1 of 5

Cost estimates is necessary for the management and their by various decision are taken by the organization. For the more accurate result, in addition to the cost estimate, regression analysis are made to measures the reliability and the precision. Reliability is one on which management made faith that is it indicates whether regression reflects actual with the variables and on the other hand precision means accuracy of the estimates which is made on analysis from the bases of regression.