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Assignment - 3 - Lab 5.6 SS

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147 views

Assignment - 3 - Lab 5.6 SS

Uploaded by

varinder01219992
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Varinder Kumar

[email protected]
MBA (TI&E) Sem-1 May 2024

Forecasting Product Demand Using Regression– ASSIGHNMENT #3


Lab 5.6 Excel IBU – 09 June 2024

Lab 5.6 Excel Solution


Forecasting Product Demand Using Regression
Analyze the Data:
Analyze Task 1: Evaluate Potential Predictors of Monthly Product Demand

Three predictors (variables) of the monthly product demand for hiking boots will
be examined. The following three independent variables are:
1. GDP (Gross Domestic Product): Monthly product demand will increase in
proportion to economic improvement. The GDP and monthly product demands
are positively correlated.
2. Temperature (weather)
3. Holiday Season: In this case, November and December are regarded as holiday
months. Relationship of three independent variables with Monthly Product
Demand:

Independent Variables Relationship with Monthly Product Demand


(Predictors)
1. GDP(Gross Domestic Positive
Product)
2. Weather (Temperature) Positive
3. Holiday Season Positive

1
Analyze Task 2: Prepare data for Analysis
We need to create the Holiday Variable for analysis.
Take 0 for non-holidays month (i: e from January to October)
Take 1 for holiday month (November & December)

2
Analyze Task 2: Analyze the Data using Regression analysis

Note:
1. The value of "Significance F" is extremely low, indicating that we will be able to
pinpoint some variables that can account for the influence of three variables on
the demand for the product: GDP, weather, and holidays.
2. An alternative measure of how well the independent variables in a regression
model explain the variability of the dependent variable is called adjusted R-
squared. Unnecessary independent variable addition to the model is penalized by
adjusted R-squared. In particular, when comparing models with varying numbers
of predictors, it accounts for the model's predictor count and offers a more
realistic depiction of the model's goodness of fit.
The model's modified R-square score in this instance is 0.781, indicating a strong
ability to explain monthly product demand.

3
Lab 5.6 Excel Assessment

Questions 1-5 Answer


Assessmen What is the data value for the holiday variable in January
t1 2021? 0
Monthly
Assessmen Product
t2 What is the dependent variable in this regression? Demand
According to the regression results, a one-point increase
Assessmen in GDP is associated with an increase in product demand
t3 by how many units (round to two digits)? 2.16 Units
Assessmen What is the adjusted R-squared for our regression model
t4 predicting product demand? 0.781
According to the regression results, a one-degree
increase in weather is associated with an increase in
Assessmen product demand by how many units (round to two
t5 digits)? 0.20 Units

Lab 5.6 Excel Analysis Questions


Does the adjusted R-square in these regressions suggest that the forecast is a
good one?
"Yes," the adjusted R-square value of 0.781 shows that the forecast model is highly accurate in
predicting how various factors would affect the monthly product demand.

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