2. Prepare a weekly forecast for the next four weeks for each product. Briefly e
ID: 464292 • Letter: 2
Question
2. Prepare a weekly forecast for the next four weeks for each product. Briefly explain why you chose the methods you used. (Hint for Product 2, a simple approach, possibly some sort of naive/intuitive approach, would be preferable to a technical approach in view of the manager's disdain of more technical methods.)
Week 1
Product 1
Product 2
1
50
40
2
54
38
3
57
41
4
60
46
5
64
42
6
67
41
7
90*
41
8
76
47
9
79
42
10
82
43
11
85
42
12
87
49
13
92
43
14
96
44
*Unusual order due to flooding of customer's warehouse.
I have seen this equation : (3.457 x Week +48.28) but I am not sure where those numbers come from - where does 3.457 and 48.28 come from because when I do the scatter chart and the linar I get different number??!!! Please help
Week 1
Product 1
Product 2
1
50
40
2
54
38
3
57
41
4
60
46
5
64
42
6
67
41
7
90*
41
8
76
47
9
79
42
10
82
43
11
85
42
12
87
49
13
92
43
14
96
44
Explanation / Answer
When we use regression model, we get following equation:
Yn = 48.286+ 3.457 X N th week.
We should see two criterias, while deciding the regression model.
1. P Value < 0.05, the model is valid
2. Adjusted R Square value - % of variation explained by R square value.In this case 88% variation of Y explained by X 9time series, Weeks nos.
Both are favorable in this case and we can use above regression model for our forecasts.
For product 2 , we used simple 4 period moving average method. Forecast values are shown in above table.
In product 2 data, we can see the seasonality and we use seasonality index to dieselize the data and use regression to project and finally bring back the seasonality into the projected data by multiplying with seasonal index.
Regression results for the product 1:
Week 1 Product 1 Product 2 1 50 40 2 54 38 3 57 41 4 60 46 5 64 42 6 67 41 7 90 41 8 76 47 9 79 42 10 82 43 11 85 42 12 87 49 13 92 43 14 96 44 15 100.14 45 16 103.60 45 17 107.06 44 18 110.51 44Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.