Simple Regression Analysis

This assignment discusses the use of simple regression and moving averages to predict outcomes. It provides step-by-step instructions on how to run these models in Excel, including examples for predicting total cost based on SAT scores, number of victories based on payroll and batting average, and demand for vacuum cleaners. Additionally, it evaluates the accuracy of different methods and considers other factors that may affect forecasting sales.

Chapter 4 - Problem 30.
The procedure to run simple regression in Excel is as written below:
1. Consider the provided data.
2. Click on Data->Select Data Analysis->Regression->Enter the input ranges and output range as
shown below:
3. Click on OK.
The output from Excel is as shown below:

The regression equation is as written below:
The calculation of total cost with a high median SAT score say 2400 is as follows:
The calculation of total cost with a low median SAT score say 500 is as follows:
To check that private schools are more expensive than public schools when SAT scores are taken
into consideration we will calculate the average SAT scores for both type of schools and put that
average in the regression equation.
The average of median SAT score for Public schools is calculated as shown below:
The calculation of total cost for Public schools with 1838 is as follows:
The average of median SAT score for Public schools is calculated as shown below:
The calculation of total cost for Private schools with 1838 is as follows:
The regression model here is not much accurate as the variability explained in the total cost is
only 16% if we look at the adjusted R-square value.
Chapter 4 - Problem 31

The procedure to run simple regression in Excel is as written below:
1. Consider the provided data.
2. Click on Data->Select Data Analysis->Regression->Enter the input ranges and output range as
shown below:
3. Click on OK
The output from Excel is as shown below:
The regression equation is as written below:

Prediction for a team with payroll of$79 is as shown below
Therefore, the number of victories for a team with a payroll of $79 is 82.
Chapter 4 - Problem32
(a) The procedure to run simple regression in Excel is as written below:
1. Consider the provided data.
2. Click on Data->Select Data Analysis->Regression->Enter the input ranges and output range as
shown below:
3. Click on OK
The output from Excel is as shown below:

The regression equation is as written below:
(b) The procedure to run simple regression in Excel is as written below:
1. Consider the provided data.
2. Click on Data->Select Data Analysis->Regression->Enter the input ranges and output range as
shown below:
3. Click on OK
The output from Excel is as shown below:

The regression equation is as written below:
(c)
The first model is better for predicting the number of victories because of higher value of
adjusted R-square.

(d)
The procedure to run simple regression in Excel is as written below:
1. Consider the provided data.
2. Click on Data->Select Data Analysis->Regression->Enter the input ranges and output range as
shown below:
3. Click on OK
The output from Excel is as shown below:
The regression equation is as written below:

In this model, ERA and AVG both are used and they explains the almost 73% variability in the
number of victories whereas the first and second model were explaining only about 34%.
Chapter 5 – Problem 25
(a) The procedure in Excel to find the moving average with three periods as written below:
1. Consider the data provided
2. Click on Data->Select Data Analysis->Moving Average->Enter the input ranges and output
range as shown below:
The output from Excel is as shown below:
Therefore, the demand for vacuum cleaners for next February is 13.66.
(b) The formula used in Excel to find the weighted moving average with three periods are as
shown below:

The output from Excel is as shown below:
Therefore, the demand for vacuum cleaners for next February is 14.7.
(c) The formula used in Excel to evaluate the accuracy of moving average method is as shown
below:

The output from Excel is as shown below:
The formula used in Excel to evaluate the accuracy of weighted moving average method is as
shown below:

The output from Excel is as shown below:
Since, the MAD is less for the first method hence, the first method is more accurate method.
(d)

Some other factors that might be considered by R. Lowenthal in forecasting the sales are as
written below:
1. The smoothing value can be increased but it may affect the accuracy of the prediction.
2. As the averages are used trend analysis cannot be performed well enough, hence a method for
analyzing the trend of sales can also be used.
Chapter 5 Problem 31
(a) The procedure in Excel to find the seasonal indices is as written below:
1. Enter the data in Excel as shown below:
2. The Formulas used in Excel are as shown below:

The values for seasonal indices are as shown below:
(b)

The formulas used in Excel for deseasonalizing the data and developing trend are as shown
below:
The desasonalized values are as shown below:
(c) The formulas in Excel to find the trend are as shown below:

The output from Excel is as shown below:
(d) The formulas in Excel for final forecast is as shown below:

The output from Excel is as follows: