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Demand
January 12
February 11
March 15
April 12
May 16
June 15
(a) Using a weighted moving average with weights of 0.60, 0.30, and
0.10, find the July forecast.
(b) Using a simple three-month moving average, find the July forecast.
(c) Using single exponential smoothing with α = 0.2 and a June forecast
= 13, find the July forecast. Make whatever assumptions you wish.
(d) Using simple linear regression analysis, calculate the regression
equation for the preceding demand data.
(e) Using the regression equation in d, calculate the forecast for July.
Find the tracking signal and state whether you think the model being used
is giving acceptable answers.
8. Raghav Jain, the new productions manager for Sound and Song, needs
to find out which variable most affects the demand for their line of
stereo speakers. He is uncertain whether the unit price of the product
or the effects of increased marketing are the main drivers in sales and
wants to use regression analysis to figure out which factor drives more
demand for their particular market. Pertinent information was
collected by an extensive marketing project that lasted over the past
10 years and was reduced to the data that follow:
(a) Perform a regression analysis based on these data using Excel. Answer
the following questions based on your results.
(b) Which variable, price or advertising, has a larger effect on sales and how
do you know?
(c ) Predict average yearly speaker sales for Sound and Song based on the
regression results if the price was Rs300 per unit and the amount spent on
advertising (in thousands) was Rs900