The following is the problem set for Part II of this Quiz. The following table s

Question

The following is the problem set for Part II of this Quiz. The following table shows the historical demand for a smartphone (in thousands of units) for six months of last year. Develop forecasts for months October to January using a moving average model with AP = 3 and then calculate the overall Mean Absolute Deviation (MAD) and Tracking Signal (TS) for months October to December. With an alpha value of 0.2 and a starting forecast in month July equal to actual in month July, develop forecasts for months August to January using exponential smoothing and then calculate the overall MAD and TS for months October to December. Develop a linear regression equation to forecast the sales of the smartphones and then calculate the number of units sold for the month of January.

Explanation / Answer

6 & 7:-

8:-

For linear regression, we would have period as independent variable and Sales as dependent variable. The regression values we get are:-

Year Month Period Sales 3pt Exp_Smoothing 3pt_dev 3pt_dev_abs Exp_Smoothing_dev Exp_Smoothing_dev_abs 1 Jul 1 60000 1 Aug 2 55000 60000 1 Sept 3 75000 59000 1 Oct 4 60000 63333.33333 62200 -3333.3 3333.333333 -2200 2200 1 Nov 5 80000 63333.33333 61760 16666.7 16666.66667 18240 18240 1 Dec 6 75000 71666.66667 65408 3333.33 3333.333333 9592 9592 2 Jan 7 71666.66667 67326.4 MAD for 3pt MAD for Exp_Smoothing 7777.777778 10010.66667

8:-

For linear regression, we would have period as independent variable and Sales as dependent variable. The regression values we get are:-

SUMMARY OUTPUT Regression Statistics Multiple R 0.695978 R Square 0.484385 Adjusted R Square 0.355482 Standard Error 8323.804 Observations 6 ANOVA df SS MS F Significance F Regression 1 2.6E+08 2.6E+08 3.757732 0.124594 Residual 4 2.77E+08 69285714 Total 5 5.38E+08 Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0% Intercept 54000 7749.04 6.968605 0.002229 32485.22 75514.78 32485.22 75514.78 Period 3857.143 1989.77 1.938487 0.124594 -1667.34 9381.629 -1667.34 9381.629 Thus the equation is 54000+3857.143 (Period). Therefore, it is 54000+3857.143(7)= 81000.

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