Share
Explore BrainMass

Widget sales - regressions. forecasting.

Q4: Regress widget sales on time and add the (a) ...there is more see problem attached

Q4: Regress widget sales on time and add the (a) line, (b) linear equation and (c) R2 (variance explained) to the graph you created in Question 3. Please explain the meaning of each. Also, please characterize the trend (if one appears to exist) in the data (be specific).

Q5 : Take your understanding of seasonality from Question 1 and use this understanding to employ a 3-month moving average to capture the seasonality present in the data. Please describe your forecasting method in words and then implement this forecasting method (forecast through month 32 in Excel . Once you have completed implementing this method, assess its performance .

Q6 (15): What is mainly wrong with the forecasting method that you developed in Question 5 (5)? Describe (be specific) how you might take what you learned in Question 4 and improve on this forecast (5) and then explain why this new method would work better

Attachments

Solution Preview

Please refer to the attached files for the response.

EQUATION OF THE LINE AND FORECASTING

Q4: Regress widget sales on time and add the (a) line, (b) linear equation and (c) R2 (variance explained) to the graph you created in Question 3. Please explain the meaning of each. Also, please characterize the trend (if one appears to exist) in the data (be specific).
x y
time Sales (000)
1 35
2 41
3 48
4 52
5 50
6 48
7 45
8 51
9 58
10 62
11 60
12 57
13 53
14 60
15 65
16 71
17 69
18 65
19 62
20 68
21 75
22 81
23 79
24 75
25 71
26 79
27 85
28 90

ANSWER:
a) Added on the graph is a line showing that during the 28 months period covered by the study, there is a general upward trend in sales. However, the plotted dots/points show too much seasonality/variation in sales.

Generated by excel:
1.591407 slope b
39.60317 y ...

Solution Summary

Widget sales regression forecasting is examined.

$2.19