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    Forecast Model Using Regression Analysis

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    Abir Ansari
    The document describes using regression analysis to develop a forecast model for monthly demand of oil changes at a garage. It finds that months are a good predictor of demand, with the regression equation being Y = 42.46 + 2.45x, where Y is monthly demand and x is the month number. This model explains 67% of demand variation. Forecasts are provided for September, October and November based on the regression equation.

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    Forecast Model Using Regression Analysis

    Uploaded by

    Abir Ansari
    1K views5 pages
    The document describes using regression analysis to develop a forecast model for monthly demand of oil changes at a garage. It finds that months are a good predictor of demand, with the regression equation being Y = 42.46 + 2.45x, where Y is monthly demand and x is the month number. This model explains 67% of demand variation. Forecasts are provided for September, October and November based on the regression equation.

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    The document describes using regression analysis to develop a forecast model for monthly demand of oil changes at a garage. It finds that months are a good predictor of demand, with the regression equation being Y = 42.46 + 2.45x, where Y is monthly demand and x is the month number. This model explains 67% of demand variation. Forecasts are provided for September, October and November based on the regression equation.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    1K views5 pages

    Forecast Model Using Regression Analysis

    Uploaded by

    Abir Ansari
    The document describes using regression analysis to develop a forecast model for monthly demand of oil changes at a garage. It finds that months are a good predictor of demand, with the regression equation being Y = 42.46 + 2.45x, where Y is monthly demand and x is the month number. This model explains 67% of demand variation. Forecasts are provided for September, October and November based on the regression equation.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 5

    Forecast Model using

    Regression Analysis
    Submitted by

    Md. Tahmidul Haq Ansari


    [email protected]

    Md. Tahmidul Haq Ansari

    Forecast Model using Regression analysis Demand for oil changes at Garcias Garage is shown below. Based on this information we are going to develop a forecast model for monthly demand on the following sections. Months January February March April May June July August Number of Oil Changes 41 46 57 52 59 51 60 62

    Are months good choice to use in forecasting demand?

    According to the problem, the dependent variable, Y, is monthly demand for oil changes and the independent variable, X, is the month. For January, let X=1, for February, let X=2 and so on.

    Using the paired month and monthly demand, we use the computer (Software - MS Excel 2007) to determine the best values of a, b, the correlation coefficient and the coefficient of determination. Use of the software MS Excel 2007 for calculating thin problem is shown step by step on the last page.

    Where, a = Intercept We know that, b = Slope x = Independent variable y = Dependent variable

    Y = a + bx

    Md. Tahmidul Haq Ansari

    After calculation we have found,

    a = 42.46 b = 2.45 r = 0.82 r2 = 0.67

    So the regression equation is,

    Y = 42.46 + 2.45x
    Are months good choice to use in forecasting demand? The sample correlation coefficient r , is 0.82. Because the value of r is very close to 1.00, we conclude that a strong positive relationship exists between months and monthly demand and that the choice was a good one. Next we examine the sample coefficient of determination, r 2, or 0.67. This value of r2 implies that 67% of the variation in monthly demand is explained by months. Other 33% is caused by other factors.

    Forecasted Demand for Oil

    According to the problem, for September, let X= 9, for October, let X= 10, for November, let X= 11.

    The forecast for September is Y = 42.46 + 2.45 (9) = 64.51

    The forecast for October is Y = 42.46 + 2.45 (10) = 66.96

    The forecast for October is Y = 42.46 + 2.45 (11) = 69.41 So we can conclude, Months September October November 3 Md. Tahmidul Haq Ansari Forecasted Demand for Oil Change 64.51 66.96 69.41

    Calculation process of Regression analysis in MS Excel 2007


    Step 1: We give input of the data in the software.

    Step 2: In second step, we go to, Data > Data Analysis > Regression > ok

    Md. Tahmidul Haq Ansari

    Step 3: After previous step a Regression dialogue box will appear on the screen. In that regression dialogue box we put X and Y values or the ranges for X and Y values. We select New Worksheet Ply under Output Options to get the results on a separate worksheet. Finally we click OK.

    Regression dialogue box

    Step 4: On a new worksheet we get the results. We use these results for decision making.

    Md. Tahmidul Haq Ansari

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