Forecasting Model Report

Essay by KrisBGUniversity, Bachelor's November 2004

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Through our process of using data analysis and comparisons of the different types of analysis that we could use we found little discrepancy between the methodologies. The data that we analyzed garnered different results throughout, however our testing remained consistent overall.

The purpose of this analysis was to forecast sales for the nest year using regression analysis, weighted analysis, moving analysis and absolute average analysis. Then we agreed on that we should use the absolute average analysis to base our final forecast on due to the consistency of 1998 versus 1999 with little change.

After developing our forecasting models we moved forward with determining the demand characteristics. There did not seem to be a high demand, however the stream appeared to be consistent. The characteristics and assumptions that we discussed were the market demand with only small peaks and valleys in average price fluctuation, process and labor rate rising slightly based on normal inflation, consistent trends and competition rose only slightly and that the quality is consistent.

Very little contrast was noted upon comparing labor, prices and sales throughout the five year period of 1994-1998. While we utilized three different "average" methodologies and a regression analysis, we found that the results were nominally (within $1,000) different as a whole, with few variances. The largest differences were noted when comparing the results of we garnered from running the averages as opposed to running a regression analysis which showed larger fluctuations. Within a normal, consistent environment this would be the least accurate of all the tests that we completed.

Observations of the team were that as the sales were higher the average price appeared to drop. Additionally, there was not sharp increase in revenue, with the highest being in 1994, however the highest jobs were in 1997.

Variables had a...