CASE STUDY, LEVINE, CHAPTER 13
“MANAGING THE SPRINGVILLE HERALD”
1. What criticism can you make concerning the method of forecasting that involved taking the new subscriptions data for the prior three months as the basis for future projections? Taking the past three months of data and projecting it to the whole year can lead to an inaccurate picture because it doesn’t take into consideration the cyclical nature of illnesses. In the winter time for instance the flu virus can get more people sick. In spring and autumn people may report more allergy related symptoms. When the weather is nice outside more people may go out, play sports and injure themselves. In the summer swimmers ear, or other sunburn related issued may be reported. Therefore they should look at a whole year worth of data and keep seasonal effects in mind.
2. What factors other than number of telemarketing hours spent might be useful in predicting the number of new subscriptions? Explain
The price may play a significant role in the number of prescriptions filled. So can the location of the store, is there a lot of foot traffic, or are there any competitors near bye? Is the store on the right side of the street, enabling easy traffic flow? The price of the competitors can also affect the numbers. Seasonal illnesses or injuries may play into it as well. Other marketing techniques such as TV, radio, newspaper to create awareness of the drugs may have an effect also. The type of the drug and the corresponding population it is targeted for is important too. For example, if it is a heart disease medicine, than the population of the elderly is relevant. If it is sickle cell disease, the population of the African American children is relevant. If it is breast cancer, then it will be predominantly for women.
3. A) The regression equation based on the excel regression analysis (screenshot below, and actual excel file attached separately) is: Ŷi = - 413.82 + 4.4 Xi
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