# ABC Furniture Company Linear Regression

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Background:

Linear Regression Forecasting and Decision Trees

Why is Forecasting important? How can we use Linear Regression as a forecasting method?

Read this introductory resource: Forecasting for Business and Using Linear Regression (attached)

Read Chapter 6, Regression Analysis pp. 159-166, in this resource:

Chase, C. W. (2013). Demand-driven forecasting: A structured approach to forecasting. John Wiley & Sons: Somerset, NJ. Retrieved from the Ebrary. Could not retrieve chapter 6 from Ebrary but found Chapter 6 on google (https://books.google.com/books?id=oe1CYQ5TxW0C&pg=PT62&source=gbs_selected_pages&cad=2#v=onepage&q&f=false)

The topics discussed here include:

1. Definition of regression

2. Correlation and regression

3. How to calculate the regression equation of X on Y.

OPTIONAL: Two videos on Khan Academy showing how to calculate regression coefficients.

Regression Line Example: http://www.khanacademy.org/video/regression-line-example?topic=statistics

Second Regression Example: http://www.khanacademy.org/video/second-regression-example?topic=statistics

PRACTICE: Download the Excel file Linear Regression Practice Examples (attached) which provides an examples and practice problems to learn how to do regression analysis in Excel.

https://brainmass.com/business/business-management/abc-furniture-company-linear-regression-626456

#### Solution Preview

INTRODUCTION

I am a consultant from the Excellent Consulting Group. My client, the ABC Furniture Company, believes that the number of customers who visit the store during any particular month is related to the total sales for the month in question, i.e. the client believes that there is a relationship between higher customer traffic and higher total sales. The client has provided me with the number of customers who visited the store over the most recent 12-month period from January to December, with the sales corresponding to each of those months. This data will be used to test the client's theory.

ANALYSIS

Linear Regression was used to analyze the number of customers and sales data provided. Note that in this analysis, we are investigating the possibility of a linear relationship ...

#### Solution Summary

The Word file contains the report, written in 514 words. The report includes explanations as well as equations, tables and charts. The Excel file contains all computations used.