Executive Summary
The company needs to consider the cost of living in the proposed new location and compare it to New York. The variables in the analysis include the cost of housing, transportation, coffee, bread, and milk. The first step will be determining the predictors of the study by looking at the P-values of each. The variables with a significant level above 0.05 will not resolve the problem because they are not statistically significant. After analyzing the MLR variables, only three have a p-value that is lower than 0.05. They include the cost of living at 0.04, bread at 0.03, and transportation at 0.003. The variables are statistically significant and will be vital in making business decisions.
The next step is analyzing the descriptive statistics, with the main focus being on bread, cost of living, and transportation. Firstly, the cost of living index had a mean of 75.49, minimum of 31.74, a median of 82.2, maximum of 100, Q1of 66.75, and Q3 of 88.33. The data indicates that most cities are above the first quartile, with only Mumbai, Prague, Warsaw, and Athens below. The following variable is the cost of bread with a mean of $1.47, minimum of $0.41, a median of $1.37, maximum of $2.93, Q1 of $1.04, and Q3 of $1.77. Cities below Q1 include Athens, Warsaw, Prague, and Mumbai, with all the others above the first quartile. The last variable is transportation cost with an average of $78.01, a minimum of $7.66, a median of $74.28, and a maximum of $173.81, Q1 of $41.20, and Q3 of $105.93. Cities below Q1 include Mumbai, Prague, Warsaw, and Athens. Cities below the first quartile (Q1) in all variables will be considered as the ideal destination.
The analysis presents Mumbai as the ideal location for the company to set up a new shop because of its low cost of living compared to Prague, Warsaw, and Athens. The data indicates that Mumbai has a cost of living index of 31.74, the cost of bread stands at $0.41, and the cost of transport at $7.66. The data of all the predictors in Mumbai are below Q1 and the data from New York. Warsaw follows as the next cheapest option, with all its variables being below Q1. Warsaw has a cost of living index of 45.45, price of bread at $0.69, and cost of transport at $30.09. However, living in Mumbai is more affordable than all the other cities making it the ideal destination. Besides, the low cost of living in the city means more profits for the company.
