Chapter summary & Homework

Homework 2

1- Name the different methods of quantitative approache and explain the main difference between them.

2- Sales figures and profits for the 12 stores of a company are in the table below. Sales are given in millions of dollars; profits are in hundreds of thousands of dollars. Calculate a regression line for the data. What is your forecast of profit for a store with sales of $27 million? $16 million?

Store Profit Sale

1 20 12

2 17 9

3 21 11

4 22 11

5 30 21

6 34 24

7 28 23

8 27 18

9 32 21

10 49 26

11 40 20

12 15 11

3- (a) Use a three-period moving average and Naive methods to forecast from month 4 to month 8. (b) Use the MAD to determine which method gives the most accurate forecast. Month Sales 1 20 2 25 3 22 4 26 5 22 6 24 7 26