Regression Analysis

Unit 5    [GB513: Business Analytics] 

 

Assignment

This assignment requires you to use Excel. Make sure to use the Assignment 5 template found in your online course when you turn in your answers.

Question 1 Determine the error for each of the following forecasts. Compute MAD and MSE.

Period Value Forecast Error

1 202 — —

2 191 202

3 173 192

4 169 181

5 171 174

6 175 172

7 182 174

8 196 179

9 204 189

10 219 198

11 227 211

Question 2 The U.S. Census Bureau publishes data on factory orders for all manufacturing, durable goods, and nondurable goods industries. Shown here are factory orders in the United States over a 13-year period ($ billion).

a. Use these data to develop forecasts for the years 6 through 13 using a 5-year moving average.

b. Use these data to develop forecasts for the years 6 through 13 using a 5-year weighted moving average. Weight the most recent year by 6, the previous year by 4, the year before that by 2, and the other years by 1.

c. Compute the errors of the forecasts in parts (a) and (b) and then the MAD. Which forecast is better?

Unit 5    [GB513: Business Analytics] 

 

Year Factory Orders ($ billion)

1 2,512.7

2 2,739.2

3 2,874.9

4 2,934.1

5 2,865.7

6 2,978.5

7 3,092.4

8 3,356.8

9 3,607.6

10 3,749.3

11 3,952.0

12 3,949.0

13 4,137.0

Question 3 The “Economic Report to the President of the United States” included data on the amounts of manufacturers’ new and unfilled orders in millions of dollars. Shown here are the figures for new orders over a 21-year period. Use Excel to develop a regression model to fit the trend effects for these data. Use a linear model and then try a quadratic model. How well does either model fit the data?

Year Total Number of New Orders

1 55,022

2 55,921

3 64,1 82

4 76,003

5 87,327

6 85,139

7 99,513

Unit 5    [GB513: Business Analytics] 

 

8 115,109

9 131,629

10 147,604

11 156,359

12 168,025

13 162,140

14 175,451

15 192,879

16 195,706

17 195,204

18 209,389

19 227,025

20 240,758

21 243,643

Submit your Assignment to the Unit 5 Dropbox.

GB513 Unit 5 Assignment

Content Points

Possible Points Earned

Provide error for each forecast by computing Mean Absolute Deviation (MAD) for Q1

5

Provide error for each forecast by computing Mean Square Error (MSE) for Q1

5

Used data in Q2 (a) to develop forecasts for the years 6 through 13 using a 5-year moving average

3

Used data in Q2 (b) to develop forecasts for the years 6 through 13 using a 5-year weighted moving average

3

Unit 5    [GB513: Business Analytics] 

 

using weighting specified in the problem.

Computed the errors of the forecasts for Q2 (a) and the Mean Absolute Deviation (MAD). Q.2(c)

3

Computed the errors of the forecasts for Q2 (b) and the Mean Absolute Deviation (MAD). Q.2(c)

3

Used Excel to develop a regression model to fit the trend effects for data in Q3.

4

Used a linear model for Q3 4

Used a quadratic model for Q3 4

Analysis

Provided a summary of the best forecast for Question 2 and justified the answer given.

5

Provided assessment of how well the models used for Question 3 fit the data and justified the answer given.

5

Writing Skills

Spelling, Grammar, and Punctuation 6

Total 50