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# Forecasting, Regression

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1)
Alternative Good Market Fair Market Poor Market
Single unit 25000 20000 -45000
Duplex 80000 30000 -10000
Triplex 100000 90000 -9000
Probability 0.4 0.35 0.25

What is the best decision based on the following table

Single unit
Duplex
Triplex

2) the following forecasting model has been developed:
Y=36+4.3X

where

y= deman for air conditioners
Xi= outside temperature

What is the demand for air conditioners when the temperature is 70 degrees
a 360
b 403
c 66
d 337

3) Bus and subway ridership is believed to be related to the number of tourists. These are the data for the past 12 years

Year # of tourists in 100,000s ridership in 1,000,000s
1 7 15
2 2 10
3 6 13
4 4 15
5 14 25
6 15 27
7 16 24
8 12 20
9 14 27
10 20 44
11 15 34
12 7 17

The regression model that reflects the relationship of the tourists to ridership is:
a Y=8,0+17.5x
b Y=7.2+2.1x
c Y=5.060+1.593x
d none of the above

4) For the problem above, what is the expected ridership if 10 million tourists visit the city?
a 5.06 million
b 2.1 million
c 23 million
d 20.99 million

Please note: The question in the attached file related to ipod has not been answerd as the question does not have complete data.

#### Solution Preview

1) Alternative Good Market Fair Market Poor Market
Single unit 25000 20000 -45000
Duplex 80000 30000 -10000
Triplex 100000 90000 -9000
Probability 0.4 0.35 0.25

What is the best decision based on the following table

Single unit
Duplex
Triplex

We calculate the expected value for each alternative.
The alternative for which the expected value is the maximum is the best decision
Expected value = sum of probability of state x value for state

Alternative Expected value
Single ...

#### Solution Summary

Answers multiple choice questions on Forecasting, Regression.

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