STAT 6003: Sales Forecasting Presentation Using Data Analysis

This presentation focuses on predicting sales from 2016 to 2020 for Industria, Nokaragua, Federal Island, and Sweden, considering factors like GDP, Average Price Index, Population, Survey Score, Number of Advertisements, and Number of Stores. Due to data unavailability for Sweden, sales figures fro...Read More

Financial Decision
Making By DATA
ANALYSIS

Introduction
• The research aims to the predict the sales from 2016 to
2020 for four chosen countries – 1) Industria, 2)
Nokaragua, 3) Federal Island, 4) Sweden.
• Factors that are considered as sales determinant – GDP,
Average Price Index, Population, Survey Score, Number of
Advertisements, Number of Stores.
• Sales data indicators such as Survey score, Advertisement
and No. of Stores for Sweden is unavailable.
• The sales figures of a country whose GDP and price index
are close to Sweden is used to predict sales for Sweden
• Appropriate forecasting and prediction methodologies
were used for the research.

Data Overview
0
2
4
6
8
10
12
1991
1994
1997
2000
2003
2006
2009
2012
2015
0
50000000000
100000000000
150000000000
200000000000
250000000000
300000000000
Comparison in GDP
Federated Islands
Industria
Nokaragua
Years
GDP (in US $)
0
1000000
2000000
3000000
4000000
Population
Federated Islands
Industria
Nokaragua
Year
Population (15 - 65 Years)
• The sales trend of Industria is rising with some fluctuations in some
years
• Sales figures for Nokaragua shows upward trend but sales is lower
than Industria
• Federated Island shows a flat trend with the lowest sales figures
• Sweden has highest GDP followed by Industria
• GDP is rising over the years and the difference in the GDP is lowering
• Federated Island is lagging behind Industria and Nokaragua
• Population trend is stable and higher than other nations for
Industria.
• Sweden shows a slow rising population trend
•Population of Federated Islands is extremely low compared to the
remaining two.

Correlation analysis
Federated Islands
Sales US$ Survey score Advertisement Stores
Sales US$ 1
Survey score 0.589 1
Advertisement 0.986 0.548 1
Stores 0.971 0.529 0.971 1
Industria
Sales US$ Survey score Advertisement Stores
Sales US$ 1
Survey score -0.201 1
Advertisement 0.913 -0.202 1
Stores 0.916 -0.231 0.970 1
Nokaragua
Sales US$ Survey score Advertisement Stores
Sales US$ 1
Survey score 0.02 1
Advertisement 0.99 0.00 1
Stores 0.99 0.01 0.99 1
Federated Islands
• Strong positive correlation between advertisement and
sales
• Strong positive correlation between sales and number of
stores
• Strong positive correlation between advertisement and
number of stores
• Survey score has a moderate positive correlation with
sales .Industria
• Sales has a strong positive correlation with
advertisement and stores.
• Strong positive correlation between advertisement and
stores
• Weak negative correlation of survey score with all other
variables Nokaragua
•Strong positive correlation between advertisement and sales
• Strong positive correlation between sales and number of
stores
•Strong positive correlation between advertisement and
number of stores
•Weak negative correlation of survey score with all other
variables.

Sales prediction of country data
• Regression equation to predict sales for the country Federated Islands is
Ln(Sales) = 12.76 + (0.07 * ln(GDP)) - (0.13 * ln(Price Index)) – (0.35 * ln(Population)) +
(0.08 * ln(Survey Score)) + (0.87 * ln(Advertisement)) + (0.23 * ln(number of stores)).
Multiple R-square = 0.99997 – It indicates a strong linear association of Sales as response
and rest other factors as predictors. 99.99% variability of sales is explained by rest
other factors in Federal Islands.
F-statistic= 400663.2568 – The value of F-statistic is high.
P-value=277963E-50 – p-value less than 0.05 indicates that we can reject the null
hypothesis of insignificant association among the factors to predict sales in Federal
Islands at 95% confidence interval.
• Regression equation to predict sales for the country Industria is
Ln(Sales) = 8.40 + (0.08 * ln(GDP)) - (0.27 * ln(Price Index)) – (0.12 * ln(Population)) +
(0.18 * ln(Survey Score)) + (0.84 * ln(Advertisement)) + (0.29 * ln(number of stores)).
Multiple R-square=0.99999 - It indicates a strong linear association of Sales as response
and rest other factors as predictors. 99.99% variability of sales is explained by rest
other factors in Industria.
F-statistic=1729984 – The value of F-statistic is very high.
P-value=7.8E-51 - p-value less than 0.05 indicates that we can reject the null hypothesis of

Sales prediction of country data
• Regression equation to predict sales for the country Nokaragus is
Ln(Sales) = -5.98 + (0.22 * ln(GDP)) - (0.03 * ln(Price Index)) – (0.91 *
ln(Population)) + (0.14 * ln(Survey Score)) + (0.37 * ln(Advertisement)) +
(0.31 * ln(number of stores)).
Multiple R-square= 0.999999 - It indicates a strong linear association of Sales as
response and rest other factors as predictors. 99.99% variability of sales is
explained by rest other factors in Nokaragua country.
F-statistic= 7801760 – the value of F-statistic is very high.
P-value= 1.01E-56 - p-value less than 0.05 indicates that we can reject the null
hypothesis of insignificant association among the factors to predict sales in
Nokaragua at 95% confidence interval.
• The predicted sales values for different years are estimated by taking antilog
(Exponential function) of the values from the above equations.

Sweden sales prediction
• The average value of the consumer’s price index is 5.31 for
Federated Islands, 2.46 for country Industria , 2.04 for
Nokaragua and 2.14 for Sweden.
• The price index for Nokaragua is closest to that of Sweden.
• The sales for Nokaragua could be represented as the sales
of Sweden.
• Similarly using linear regression model, the sales of Sweden
for 2016 – 2020 has been established.

Suggestions
• Expansion of business is profitable in Industria as the country shows
highest trend. Sweden also indicates good results in different aspects.
• Advertisement and number of stores should be increased to increase
Sales and vice versa.
• A company in Federated Islands should work on all of the considered
factors to increase sales as it shows comparatively bad results.
• In Federated Islands, companies need to keep prices low to increase
sales.
• Entering a new market in Sweden is Profitable.

Thank You