Describe linear regression model to forecast demands


Response to the following problem:

Fortín Inc. manufactures touch screen computers for a niche market. A prior study shows that the product would be outdated by the end of June 2015, due the rapid changes in the product's industry.Fortín has produced enough to satisfy the demand until the end of May 2015, just in case that saledidn'tmeet expectations. After reviewing sales [and at marketing request], the administration was considering to manufacture enough computers to satisfy June's demand.Due to prior commitments, the company could not manufacture more than 820 computers. If the computer's demand were as shown below, andconsidering using a moving average of n=3, a simple exponential smoothingwith a=0.35 or a linear regression model to forecast January 2017 and February 2017 demands, should the company commit to this initiative? Explain all decisions made. (Note: First plot the data to determine if there is any seasonality.)

Quarter           Sales

January 16         990

February 16       970

March 16           940

April 16             890

May 16              1050

June 16             920

July 16              1020

August 16         1030

September 16    1100

October 16        1010

November 16     1090

December 16      1080

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Managerial Accounting: Describe linear regression model to forecast demands
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