Forecasting and Regression Models for Big D Inc.

Running head: BIG D INC.
Big D Inc.
Name of Student:
Name of the University:
Author note:
1.

1BIG D INC.
There are various tools that are utilised by companies to get a sense of what their
future will look like, one of those tool is called the Forecasting. With this tool, companies are
able to decide what they want their budget to be, the target they aim to achieve along with an
overall plan for their business (Poll et al., 2018). This tool is basically able to predict what
will happen in the future of a company through any changes that they might experience. In
true sense of this tool, it is basically able to let the executives at the company know if the
business is doomed to failure or destined for success. However, forecasting can never have
100 percent accuracy so it is important to look at the results objectively. There are many
situations that can arise for a company that will completely change the results of the
Forecasting.
On the other hand we have the Regression model which a powerful statistical method
that allows companies to examine the relationship that they have between two or more
variables that they are interested to test out (Green & Armstrong, 2015). This model can be
used for both prediction and also forecasting so that the company is able to understand the
impact of their dependent and independent variables. The independent variables, also known
as a predictor, are those that can be manipulated or its changes can be measured by the
researcher. This type of variable is able to predict what the dependent variables in the model
would be, where the dependent variables represent the factors in an experiment that measures
the effect of the independent variable. The dependent variable is also known as the predicted
variables. For example, workers in Chicago have to use means of transportation to get to
work so in this case the transportation is the dependent variable since it can be changed as
they can opt for a different means of transport each day. However, traffic and a convenient
transit system along with the price of ticket can be all the variables that will affect the means
of transport.