IBM 320 – Business Application
Part I: Essay
Essay #1: Why is the understanding of sales forecasting critical to the success of business? What method and/or tools (at least two) can one use to forecast sales? A. Why is forecasting so important?
Provides direction and focus.
Helps with resource allocation.
Enhances customer service and ‘experience.”
Improves inventory control.
Reduces the cash-to-cash cycle.
B. What method and/or tools use to forecast sales?
Jury of Executive Option: This is a method of combining and averaging views of several executives regarding a specific forecast. It will be used when there is no past data or no causal data. Regression Analysis: is a statistical process for estimating the relationships among variables. It includes many techniques for modeling and analyzing several variables, when the focus is on the relationship between a dependent variable and one or more independent variables. Regression analysis can be very helpful for analyzing large amounts of data and making forecasts and predictions. Time Series Models: Time series models assume that observations vary according to some probability distribution about an underlying function of time. Time series analysis provides tools for selecting a model that can be used to forecast of future events. It is used base upon pattern of data. Essay #2: Explain linear regression and how it can be used. Then provide three examples of how it might be used in Business. A: Linear regression: use to predict value to determine whether there is a core-relation between two variables. And it is an approach for modeling the relationship between a scalar dependent variable y and one or more explanatory variables denoted X. B: For Examples:
A linear analysis on the sales data with monthly sales on the y-axis and time on the x-axis would produce a line that that depicts the upward trend in sales. A linear analysis on...
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