Tucson Machinery, Inc. manufactures numerically controlled machines, which sell for an average price of $0.50 million each. Sales for these NCMs for the past two years were as follows:
(see chart in attached file)
Quarter Quantity Quarter Quantity
I 12 I 16
II 18 II 24
III 26 III 28
IV 16 IV 18
a. Calculate regression equation
b. Forecast sale for the year 2000 and 2001
Discussion and computations provided.
ABC Furniture Company Linear Regression
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.