Professional Documents
Culture Documents
Question 1
i)
ii) Due to David being able to show her probabilities of each market
iii)
iv)
Question 2A
i)
Month (2020) Actual Sales Exponential Linear Trend
Smoothing Constant
0.65
January 15 - 13.25
February 17 15 12.80
March 6 16.3 12.35
April 13 9.611 11.90
May 11 11.81 11.45
June 7 11.28 11
July 12 8.50 10.55
August 10 10.78 10.10
September 13 10.27 9.65
October 8 12.04 9.20
November 9 9.41 8.75
ii)
Linear Trend Exponential Smoothing
MAD = 24.2 / 11 = 2.2 MAD = 32.24 / 10 = 3.22
MSE = 93.26 / 11 = 8.48 MSE = 177.36 / 10 = 17.34
iii) A decision maker would be interested in the above calculations as it shows the decision
maker which forecasting method they should select. Based on what the decision maker is
focusing on they would choose the method with lowest MAD or MSE.
iv) Two disadvantages of regression are outliers negatively affecting the data and the parameter
instability.
Question 2B.
i)
SUMMARY OUTPUT
Regression Statistics
Multiple R 0.6918
R Square 0.4786
Adjusted R Square 0.4312
Standard Error 0.4961
Observations 13
ANOVA
Df SS MS F Significance F
Regression 1 2.4847 2.4847 10.1004 0.0088
Residual 11 2.707 0.246
Total 12 5.1917
iii)
B0 is Y intercept therefore when x=0 y =1.0278
B1 is a 1 unit increase of x1 will cause an increase in Y by 0.001143
iv) At a 1% level of significance the slope coefficient is significant by comparing the slope
coefficient to its p-value.