Essays on Business Statistics

Abstract

Linear Regression (LR) forecasts the value of a random variable (dependent variable) for a given value of an associated independent variable. The regression equation provides the formula for such a calculation. Simple Exponential Smoothing (SES) forecasts the bases its forecasts on a weighted average of past data, with more weight on the more recent periods. A smoothing factor helps in providing weight. It generally forecasts for the short-term. In the present case, we forecast the sales data for year-2 for ABC Furniture Company using both the methods. For SES, we use two smoothing factors α equal to 0.15 and 0.90 ...

Abstract

Regression analysis estimates the value of a random variable (dependent variable) for a given value of an associated independent variable. The regression equation provides the formula for such a calculation. In the present case, which is about the analysis of the dependence of total monthly sales on the monthly customer traffic, the consultant first examines to see if there is a correlation between the two variables. To achieve this, the consultant uses the scatterplot, plotting the points on a graph. After analyzing the scatterplot, the consultant is convinced that there exists a strong positive linear correlation between the two ...

Abstract

Decision situations can be analyzed using different methods out which decision trees are useful to analyze complex situations. Frequently, decision situation is complicated because the payoffs are not only dependent on the initial decision but also dependent on the additional decisions are taken in the sequential step process. Decision trees can identify the best initial as well as the best subsequent actions. The decision criterion that a decision tree satisfies the Bayesian expected payoff criterion. The present case has multiple alternatives and multiple probabilities; decision tree is the best method for solving this. The resulting decision tree has three ...

Report on the relationship between assets and sales

Executive summary A company’s investment in foreign assets has a bearing on the amount of foreign sales it makes. The regression analysis indicates a positive association between the ratio of foreign sales to total sales and the ratio of foreign assets to total assets. This implies that transnational companies should invest more in foreign assets to improve their foreign sales. They should also consider other factors affecting foreign sales such as international marketing strategies including advertising expenditure, among others. Investment in foreign assets is not the only contributor to foreign sales as indicated by the model’s coefficient ...

Seasonal index is a method used to measure the variations that are experienced due to the change in seasonal demand. They are used in adjusting of the demand forecast by multiplying the product base forecast by the seasonal index. Holidays like Easter, seasons like summer time, and super bowl events are better serviced with the seasonal index. The problem with seasonality is that seasons always change and this variation may not coincide with the demand forecast calculated using the seasonal index (Sharma, 2012). Therefore, a business has to adjust accordingly to the current situation which may be costly and ...

Introduction

The firm randomly sampled 30 customers that visited the restaurant between 1st match 2016 to 28th march the same year. The overall is further divided into three strata with each having a total of ten respondent based on whether the customer purchased alcohol beverage, non-alcoholic beverage or food. The decision is taken since the paper aims at understanding its ability to retain customers based on satisfaction and probability of return measures in each business line. In addition, the firm is interested in understanding satisfaction level associated with the support facilities such as the washroom, interior design, sink cleanliness and ...