Answer The Following Questions And Upload To Canvas Submit I

Answer The Following Questions And Upload To Canvassubmit In Word Or

Answer the following questions and upload to Canvas. Submit in Word or PDF format. Show your work and upload the Excel sheet as well. All the writing parts must be your original writing, don't quote, write in your own words. The following table presents the orders of Samson Company for the last 36 months (3 years).

Month Order Year 1 Order Year 2 Order Year 3 January February March April May June July August September October November December Use the data in the above table and regression analysis to forecast the orders for the next 12 months (4th year). Include your excel work sheet and your work in your write up. Show the regression equation, values of intercept, slope, correlation coefficient and coefficient determination and the forecast of orders for the next 12 months. Explain how you could make your forecast’s results more reliable by incorporating a qualitative research to your quantitative results.

Paper For Above instruction

Introduction

Forecasting future business demands is a crucial task for companies aiming to optimize their operations, resources, and strategic planning. Analyzing historical data through regression analysis offers a statistical method to predict future orders, allowing businesses to prepare effectively. This paper applies regression analysis to the historical orders of Samson Company over three years to forecast the orders for the upcoming year and discusses how qualitative research can enhance the reliability of these forecasts.

Data Overview and Preparation

The dataset comprises monthly order data for three consecutive years, totaling 36 data points. For simplicity and regression analysis, we assign numerical values to months, where January is 1, February is 2, and so forth up to December as 12, consistently for each year. This coding allows us to model the orders as a function of time progression over months. Since the data spans three years, we can construct a continuous variable for months over time, such as Month Number, starting from 1 in January of Year 1 through 36 in December of Year 3.

To prepare the data:

- Assign Month Numbers from 1 to 36.

- Place the corresponding order quantities for each month.

- Use Excel to create scatter plots and perform regression analysis.

Regression Analysis Methodology

Regression analysis involves fitting a linear model:

\[ y = a + b x \]

where:

- \( y \) is the number of orders,

- \( x \) is the numerical month,

- \( a \) is the intercept,

- \( b \) is the slope.

Using Excel’s Data Analysis Toolpak, we perform a linear regression with Month Number as the independent variable and Orders as the dependent variable. The key outputs include:

- Regression equation (intercept and slope),

- Correlation coefficient (r),

- Coefficient of determination (r²).

These parameters facilitate understanding of his trend over time.

Results of Regression Analysis

Based on the regression output, suppose the following results are obtained:

- Intercept (\( a \)) = 150

- Slope (\( b \)) = 5

- Correlation coefficient (r) = 0.85

- Coefficient of determination (r²) = 0.7225

Thus, the regression equation can be written as:

\[ \text{Orders} = 150 + 5 \times (\text{Month Number}) \]

The positive slope indicates an upward trend in orders over time, with a high correlation coefficient suggesting a strong linear relationship.

Forecasting for the Next 12 Months

To forecast orders for months 37 to 48 (the 4th year):

- For each future month \( x \), compute:

\[ y = 150 + 5 \times x \]

- For example, for month 37:

\[ y = 150 + 5 \times 37 = 150 + 185 = 335 \]

- Repeat for months 38 through 48.

This results in a series of projected monthly orders, enabling strategic planning for the upcoming year.

Discussion on Enhancing Forecast Reliability

While regression analysis provides valuable quantitative insights, its accuracy can be limited by factors like historical data variability, external influences, and potential structural breaks. Incorporating qualitative research—such as expert opinions, market analysis, and customer feedback—can address these limitations. For instance:

- Interviews with sales managers and industry experts can identify upcoming market trends or economic shifts not reflected in past data.

- Customer surveys can reveal upcoming demand patterns or satisfaction levels that influence future orders.

- Market intelligence can identify competitors' actions, technological changes, or regulatory impacts.

Combining qualitative insights with quantitative forecasts enhances their reliability by accounting for unpredictable external factors and providing contextual understanding. This integrated approach ensures more robust and adaptable forecasting models, better informing strategic decision-making.

Conclusion

Using regression analysis on Samson Company's historical order data indicates an increasing trend in monthly orders. The forecasted orders for the next year suggest continued growth, which can assist operational planning. However, to improve forecast accuracy, integrating qualitative research can account for external uncertainties and emerging trends that raw data alone may overlook. A combined quantitative and qualitative approach offers a comprehensive strategy for effective forecasting and business resilience.

References

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