1(

FORECASTING PROBLEMS
1. A manufacturing company has monthly demand for one of its products as follows: MONTH January e!ruary $arch April $ay June July August DEMAND 520 "#0 550 5'0 (00 "20 510 (10

Develop a three-period average forecast and a three period weighted moving average forecast with weights of 5% & and 2 for the most recent demand values% in that order. )ndicate which forecast would seem to !e most accurate $a*e a forecast of septem!er !y using !oth approaches.

2. A computer software firm has e+perienced the following demand for its ,-ersonal inance. software pac*age. Period 1 2 & " 5 ( / ' Units 5( (1 55 /0 (( (5 /2 /5 Develop an e+ponential smoothing forecast using an alpha value of 0."0

&. 0he head of 1usiness Department at 2$3 wants to forecast the num!er of students who will enroll in production4operations management ne+t semester in order to determine how many sections to schedule. 0he department has accumulated the following enrollment data for the

past ' semesters. Semester

1 2 & " 5 ( / '

Students enrolled in POM

'0 #0 /0 '" 100 115 #' 1&0

a5 compute a &-semester moving average forecast for semester " through ' !5 6ompute the e+ponentially smoothed forecast 7alpha80.205 for the enrollment data.

1/

c5 6ompare two forecasts and indicate the most accurate. d5 $a*e a forecast for the ne+t semester 7semester #5 with the most accurate approach. ". A16 9ardware handles spare parts for lawn-mowers. 0he following data were collected for one wee* in April when replacement for lawn-mower !lades were in high demand. Da 10 12 1& 15 1/ 20 21 Demand 15 1( 1' 22 21 2& 2" 8 15 and alpha80.2.

:imulate a forecast using simple smoothing for the wee*% starting with ind also the forecast for the 'th day. 5. ill in the !lan* places. Quarter 200" ) )) ))) ); !!!!!!!!!!!!!!!!!!!!!!!!!! 2005 ) )) ))) ); 200( ) II ))) ); &" 50 5' &' <<< <<< <<< <<< Quantity 2( &' 5" &" Mo"in# Totals 1(0 1/2 1/( 1'0 1#0 1#/.2 20"." 211.(

1'

(. 3sing total moving average method to forecast the =uarterly values of 200/. $ears 200" %uarters ) )) ))) ); ) )) ))) ); ) )) ))) ); Sales &million 'ottles( 1'.2 2#.2 22.2 1/." 1#.2 &0.' 2".2 1'.2 21.( &&.2 2(.2 20.'

2005

200(

/.

0he general manager of a !uilding materials production plant feels the demand for plaster!oard shipments may !e related to the num!er of construction permits issued in the municipality during the previous =uarter. 0he manager has collected the data shown in the accompanying ta!le.

Constru)tion Permits
15 # "0 20 25 25 15 &5

Plaster'oard S*i+ments
( a. ind a regression forecasting e=uation " !. Determine a point estimate for plaster!oard 1( shipments when the num!er of construction ( permits is &0. 1& c. >iven the data on permits and shipments% # compute the standard deviation of regression. 10 d. ind the prediction interval of #0?.7std.-t ta!le5 1( e. ind the prediction interval of #5.5? 7normal5 for the specific amount of shipments when permits num!er &0. 7for this part assume regression e=uation has !een derived from sufficiently large sample that the interval form e=ual to y@4-A.s may

the your a prediction !e used.5 f. Determine r and coefficient of determination and interpret them. g. 0est the correlation coefficient at 5? level of significance. )s the correlation coefficient significant at the level 5?B h. 1y using correlation coefficient analysis find the regression forecasting e=uation% and e+plain why this e=uation is different than the one you found in 7a5. '. A16 9ardware handles spare parts for lawn mowers. 0he following data were collected for one wee* in April when replacement lawn-mower-!lades were in high demand. 0he firm also collected necessary data on the total sales dollars generated !y the store. 0he manager of the

store would li*e to *now if the total sales are a good predictor of lawn-mower-!lade

1# sales.
Da 1 2 & " 5 ( / a5 the !5 c5 d5 e5 Demand for Lawn-mowers 10 12 1& 15 20 25 2" Total sales of the store(000$) 10 1& 1" 1( 1# 20 20

or the a!ove data calculate the correlation coefficient !etween Demand for lawn-mower !lade and 0otal sales of the store% and interpret result. Chat percentage of variation in lawn-mower !lade sales can !e e+plained !y total sales of the storeB 0est the correlation coefficient at 5? level of significance. 6ompute the forecast of 'th day total sales of the store. 3sing the forecast of total sales you found at 7d5% find the forecasted demand for lawn-mower !lade sales for the same date with #0? pro!a!ility.

#. Ali and ArAu are planning to set up an ice-cream stand in Daguna4>aAimagusa. After si+ months of operation% the o!served sales of ice-cream 7in $35 and the num!er of Daguna

visitors are Mont*

1 2 3 4 5 6 a) b) c)

I)e,)ream sales &MU(

200 300 400 600 700 800

La#una -isitors
800 900 1100 1400 1800 2000

Determine a regression e=uation treating ice-cream sales as the dependent varia!le and Daguna visitors as the independent varia!le. if you e+pect the Daguna visitors to pea* out at a!out &000 persons ne+t month% what would !e the e+pected ice-cream salesB e+press your forecast with ('.&? pro!a!ility limits.

10. )n a manufacturing process the assem!ly-line speed 7meter4minute5 was thought to affect the num!er of defective parts found during the inspection process. 0o test this theory% management devised a situation where the same !atch 7lot5 of parts was inspected visually at a variety of line speeds. 0he following data were collected.

20

# of defective Line parts found speed 21 20 1# 20 15 "0 1( &0 1" (0 1/ "0 a. Develop the estimated Eegression 2=uation that relates line speed to the num!er of defective parts found. !. 3se the e=uation developed in part 7a5 to forecast the num!er of defective parts found for a line speed of 50 meters per minute. c. 2+press your forecast within #5.5? pro!a!ility limits. 7Assuming n is large5

11. :ergioFs Eestaurants collected the following data on the relationship !etween advertising and sales at a sample of five restaurants. Advertisin "#penditures (000 $%) 1 1 (
10 1"

!ales (000 $%) 1# "" "0

52 55

a. Determine the strength of the causal relationship !etween advertising e+penditures and sales of the restaurants and interpret the result. !. Chat is the coefficient of determinationB Chat does it mean to youB c. 0est the correlation coefficient you found in 7a5 at 5? level of significance. )s the correlation coefficient significant at this levelB d. 3sing correlation coefficient find regression forecasting e=uation.

12. &ear Quarter Demand (tons)

21
200" ) )) ))) ); ) )) ))) ); ) )) ))) ); 105 150 #& 121 1"0 1/0 105 150 150 1/0 110 1&0

2005

200(

3se $oving 0otals to forecast the =uarterly demand for the year 200/. 1&. 0he data shown in the accompanying ta!le include the num!er of lost-time accidents for the )Amir Dum!er 6ompany over the past / years. :ome additional calculations are included to help you answer the following =uestions. $anager of the company uses the num!er of employees 7in thousands5 to predict the num!er of accidents. $EAR NO. OF NO. OF EMPLO$EES ACCIDENTS &///( 03 04 4/ 48 73 7/ 72 '()* 3 4/ 03 05 02 7/ 73 '(+0 443 066 6// 828 0443 1// 0781 '+,-, 43 6// 443 746 451 1// 0443 23 46/ 7// 685 313 1// 0413

0112 0115 0111 4/// 4//0 4//4 4//7

'--.. '-.)-

a. 3se the normal e=uations to develop a linear regression e=uation for forecasting the num!er of accidents on the !asis of the num!er of employees. :tate the e=uation. 3se the e=uation to forecast the num!er of accidents when the num!er of employees is &&70005. !. Assuming n is large% calculate the #5.5 percent confidence limits for the num!er of accidents when the num!er of employees is &&70005. c. Chat is the correlation coefficient !etween num!er of employees and the num!er of accidentsB )nterpret your result. d. Chat percentage of the variation in the num!er of accidents is e+plained !y the employment levelB e. )s the correlation significant at the 5? levelB

22

1". Gitchens of 0omorrow )nc. has collected the following data to learn if the num!er of !uilding permits might !e a useful predictor of their ca!inet sales. BUILDING PERMITS &//( 2 5 1 2 5 " & " 1 42 CABINET SALES &/// MU( a. 3se the normal e=uations to derive a regression forecasting e=uation. & !. 6ompute the standard deviation of regression 5 c. Assume your regression has !een derived from a 5 sufficiently large sample that the interval estimate ( form e=ual to $ 9:.S ; may !e used. / d. 2sta!lish a ##./? prediction interval estimate for ( the specific amount of ca!inet sales 7000 $35when 5 permits num!er "."7005. 6ompute the coefficient of 5 correlation and e+plain the meaning of it. & e. 0est the significance of r for 10? and n8#. 63

f. 3se the correlation coefficient formula to derive a regression forecasting e=uation. g. )s there any difference !etween the two e=uations you derived at a. and f. 15. A company wants to develop a means to forecast its carpet sales. 0he store manager !elieves that the storeFs sales are directly related to the num!er of new housing starts in town. 0he manager has gathered data from 6ham!er of 6ommerce records of monthly house construction permits and from store records on monthly sales. 0hese data as follows: $onthly /onstruction $onthly /arpet 0ermits !ales (000 metres) "2 20 /0 "0 20 1( 2" 12 &2 &2 1' ' '2 "' &0 "" &( &( 52 5( a. Develop a linear Eegression $odel for these data and forecast carpet sales if &0 construction permits for new homes are filed. !. 6alculate the standard deviation of regression.

c. :tate your forecast in the confidence limits of #0?.

1(. Demand for hoc*ey s*ates at a local sports store for the past eight wee*s has !een

2&
<ee= 1 2 & " 5 ( / ' Demand 122 1&0 #' 121 #( 152 11& 12"

3se a simple e+ponential smoothing model with alpha80.(. Assume the forecast for -eriod 1 was 120. $a*e a forecast for period #. 1/. A retail chain of eyewear specialist has !een e+perimenting with sales price of contact lenses. 0he following data have !een o!tained. A"era#e lenses +er da !!!!!!! 200 2" 1#0 2( 1'' 2/ 1'0 2' 1/0 2# 1(2 &0 1/0 &2 a. Pri)e +er lens> MU

or the a!ove data calculate the correlation coefficient !etween lens price and lens sales and interpret the result. !. Chat percentage of variation in lens sales can !e e+plained !y prices. c. 0est the correlation coefficient at 5? level of significance. d. Chat is #5? confidence interval for demand at price 2' $3. 79int: n8/5 1'. ill in the !lan* places %uarters Demand&tons( ) 105 )) 150 ))) #5 ); 120 <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<Mo"in# TOTALS 2005 ) 150 515 )) 200 5(5 ))) 125 5#5 ); 1/5 (50 200( ) <<<< (#0 )) <<<< /&&.5 ))) <<<< /// ); <<<< '20.5 1#. 6ompute a forecast for the demand in each of the =uarters of the following years% 200/. Hear Iuarter Demand $ear 200"

2"
2005 1 2 & " 1 2 & " #2 '2 '" #2 #0 '0 '2 #0

200(

20. A company has collected the following data to learn if the num!er of !uilding permits might !e a useful predictor of their *itchen ca!inet demand. Buildin# +ermits ; 7J005 2 5 1 2 5 " & " 1 a5. !5.

Ca'inet Sales
7J005 ( 10 10 12 1" 12 10 10 (

3se the normal e=uations to derive a regression forecasting e=uation. 6ompute the standard deviation of regression

c5.

Assume our regression e=uation has !een derived from a sufficiently large sample. 2sta!lish a #5.5? confidence limits estimate for the specific amount of ca!inet sales 7J0005 when permits num!er is "." 7005. d5.
e5. f5. g5. h5. you

ind the prediction interval of #0?% when permits num!er is "." 7005.
Determine r and interpret it. Determine coefficient of determination and interpret it. 0est the correlation coefficient at 5? level of significance. 1y using correlation coefficient analysis find the regression forecasting e=uation% and e+plain why this e=uation is different than the one found in 7a5.

21. A company wants to develop a means to forecast its carpet sales. 0he store manager !elieves that the storeFs sales are directly related to the num!er of new housing starts in town. 0he

25
manager has gathered data from 6ham!er of 6ommerce records of monthly house construction permits and from store records on monthly sales.

$onthly /onstruction
0ermits "2 /0 20 2" &2 1' '2 &0 &( 52

$onthly /arpet
!ales (000 metres) 10 20 ' ( 1( " 2" 22 1' 2'

a. Develop a linear Eegression $odel for this data and forecast carpet sales if &0 construction permits for new homes are filed. a. 6alculate the standard deviation of regression. !. :tate your forecast in the confidence limits of #0?. c. Determine r and interpret it d. Determine the strength of the causal relationship !etween monthly sales and new home construction using correlation. e. 0est the correlation coefficient at 5? level of significance. 22. 3sing total moving average method to forecast the =uarterly values of 200/. Hears 200" Iuarters ) )) ))) ); ) )) ))) ); ) )) ))) ); :ales 7million !ottles5 #1 1"( 111 '/ #( 15" 121 #1 10' 1(( 1&1 10"

2005

200(

2&. 00 6onstruction 6ompany renovates old homes in $agusa. Kver time% the company has found that its $3 volume of renovation wor* is dependent on the $agusa area payroll. 0he

2(
figures for 00Fs revenues and the amount of money earned !y wage earners in $agusa for the past si+ years are presented in the ta!le !elow.

$ears 0112 0115 0111 4/// 4//0 4//4

Sales Pa roll &0//.///MU( &0//.///.///MU( 4./ 0 7./ 7 4.3 6 4./ 4 4./ 0 7.3 2

a. 3sing sales data a!ove develop a regression e=uation. !. ind correlation coefficient and determination coefficient and interpret them. c. 0est the correlation coefficient at 5? level of significance. )s the correlation coefficient meaningful 7significant5 at this levelB d. 3sing correlation coefficient% find regression e=uation and e+plain the difference !etween the two regression e=uations in 7a5 and 7d5. e. 6alculate standard deviation of the regression e=uation and e+press your forecast within #0? pro!a!ility limits% if the local cham!er of commerce predicts the $agusa area payroll will !e (00 million $3 ne+t year. f. ind the forecast of $agusa Area -ayroll for the year 200&. g. ind the regression e=uation using the forecast found in 7f5 h. Assuming sample is large 7nL&05 find the confidence intervals for (5.5? pro!a!ility. 2". test was )n a manufacturing process t*e assem'l ,line s+eed 7meter4minute5 was thought to a??e)t t*e num'er o? de?e)ti"e +arts ?ound during the inspection process. 0o this theory% management devised a situation where the same !atch 7lot5 of parts inspected visually at a variety of line speeds. 0he following data were collected. # of defective parts found 44 4/ 05 05 03 Line speed 4/ 4/ 6/ 7/ 8/

05

6/ a. Develop the estimated Eegression 2=uation that relates line speed to the num!er of defective parts found. !. 3se the e=uation developed in part 7a5 to forecast the num!er of defective parts found for a line speed of 50 meters per minute.
c. 2+press your forecast within ##./ ? pro!a!ility limits. 7assuming n is large5

2/

25.

Eoom registrations in the $agusa -laAa 9otel have !een recorded for the past nine years. $anagement would li*e to determine the mathematical trend of guest registration in order to proMect future occupancy. 0his estimate would help the hotel management to determine whether a future e+pansion will !e needed. >iven the following time-series data% develop a trend e=uatin relating to registrations to time. 0hen% a5 orecast ne+t yearFs registrations. !5 >ive your ne+t yearFs forecast with #5? pro!a!ility 7i.e. assuming the level of significance is e=ual to 5?5 c5 Assuming n is large 7i.e. nN&05% show your confidence limits for the ne+t year with ?#5.5 pro!a!ility. &ears (,,(,,+ (,,* (,,2 (,,) (,,. (,,, 3000 300( 1e istrants(000) () (2 (2 3( 30 30 33* 3+

2(.

Time 0 4 7 6 Demand (0 (+ (, 32

3 8 -( -*

2 5 -, ++

1 0/ *( **

00 04 2( *+

a5 Assume 1 8 ' and O 8 0.& . 3se an e+ponential smoothing factor to forecast demand in periods 2-1&. !5 2/. &ear 200" Quarter ) )) ))) ); ) )) ))) ); ) )) ))) Demand for fertili4er (tons) 50 /& "5 (0 /1 '5 50 (1 /1 '0 55 ind the mean a!solute deviation of e+ponential smoothing. P

2005

200(

2' ); (5 a. 6ompute a three-=uarter moving average forecast. 6ompute also the forecast error for each =uarter. !. 6ompute the =uarterly forecasted demand for the year 200/. 2'. 0he manager of $agusa 0ransport 6o. wishes to forecast the num!er of miles driven !y his truc*s for the coming three years.
&ears 555555 2001 2002 200& 200" 2005 200( Thousands of $iles driven 22 2" &" &0 "0 50

a5 6ompute the forecast of miles driven for the ne+t three years 7200/% 200' and 200#5 !5 >ive your forecast for the year 200/ with ?#5 pro!a!ility 7i.e. assuming the level of significance is e=ual to ?55 c5 Assuming n is large 7i.e. n &05% show your confidence limits for the year 200' with ?('.& pro!a!ility.

2#.

6ovem7er 10 11 12 1& 1" 15 a5 !5 c5 the d5

Demand 20 2' &' 52 (2 /0

3se a simple &-period moving average to demand for 1& Qovem!er-15 Qovem!er. ind the average error for that period. Assume that 182" and 8 0.(. 3se an e+ponential smoothing method to forecast demand in periods 11 Qovem!er-15 Qovem!er. ind average error. 6ompare the methods and state which one you prefer and whyB

&0.

0he monthly sales for 0elco 1atteries )nc.% were as follows: Mont* January e!ruary $arch April Sales 20 21 15 1" Mont* Kcto!er Qovem!er Decem!er Sales 20 21 2&

2#
$ay 1& June 1( July 1/ August 1' :eptem!er 20 orecast past sales using each of the followingR a. A three-month moving average% !. a (-month weighted average using 1%1%1%2%2%2% and & with the heaviest weights applied to the most recent months. c. 2+ponential smoothing using an @ A /.7 and a January forecast of 20. d. Chich method you prefer and whyB e. using the method you chose% forecast January sales of the coming year.

&1.

Dr. Alev Ha*ar% a $agusa psychologist% specialiAes in treating patients who are agoraphic 7afraid to leave their homes5. 0he following ta!le indicates how many patients Dr. Ha*ar has seen each year for the past 10 years. $ear 1##/ 1##' 1### 2000 2001 2002 200& 200" 2005 200( No.o? Patients &( && "0 "1 "0 55 (0 5" 5' (1

a.3sing trend analysis% predict the num!er of patients Dr. Ha*ar will see in years 200/ and 200'. !.Chat is the standard error of the forecastsB c. orecast num!er of patients in 200/ at 5? level of significance. d.Assuming sample is large 7i.e. nL&05% state your forecast of 200/ within #5.5?confidence interval. &2. Data collected on the yearly demand for 50-*g !ags of fertiliAer at )lhandir >arden :upply are shown in the ta!le !elow. D"$A6D 891 8"1T:L:;"1 (000 of <A=!) " ( " 5 10 ' / #

&"A1 1 2 & " 5 ( / '

&0
# 10 11 12 1" 15

a. Develop a three-year moving average to forecast sales. !. Develop a four-year moving average for demand for fertiliAer. c. 2stimate demand again with weighted three-year moving average in which sales in the most recent year are given a weight of 2 and sales in other two years are each given a weight of 1. d. 0hree different forecasts were developed for the demand for fertiliAer. 0hese three forecasts are a three-year moving average% four-year moving average and a weighted moving average. Chich one would you use and e+plain whyB e. 3se e+ponential smoothing with a smoothing constant of 0.& to forecast the demand for fertiliAer. Assume that last periodFs 7yearFs5 sales forecast for year 1 is 5 000 !ags to !egin the procedure. f. Could you prefer to use the e+ponential smoothing model or one of the a!ove models. 2+plain your choice. And according to your choice forecast the year 12. &&. >irne $anufacturing 6ompanyFs demand for electrical generators over the period 2000 - 200( is shown in ta!le !elow. $ear 2000 2001 2002 200& 200" 2005 200( Ele)tri)al Generators Sold /" /# '0 #0 105 1"2 122

a. Develop a linear trend line !y using the least s=uares method. !. 2stimate the demand in 200/ and 200'. c. 6alculate the standard error of the past record. d. >ive your forecast for the year 200' at 5? level of significance. e. Assume n is large 7nL&05% give your forecast for the year 200/ within #5.5? confidence interval. &". 0he following gives the num!er of pints of type K 7Eh@5 !lood used at Qal!antoglu 9ospital in the past ( wee*s: <ee= o? August " August 11 August 1' August 25 Pints Used &(0 &'# "10 &'1

&1
:eptem!er 1 :eptem!er ' a. !. c. &5. &(' &/"

orecast the demand for the wee* of :eptem!er 15 using a &-wee* moving average. 3se a &-wee*-weighted moving average% with weights of 1%&% and (% using ( for the most recent wee*. orecast demand for the wee* :eptem!er 15. 6ompute the forecast for the a!ove data using e+ponential smoothing with a forecast for August " of &(0 and O 80.2. orecast the demand for the wee* of :eptem!er15. 7:how all your calculations and errors in ta!ular form.5 0he manager of the -etroco :ervice :tation wants to forecast the demand for unleaded gasoline ne+t month so that the proper num!er of gallons can !e ordered from the distri!utor. 0he owner has accumulated the following data on demand for unleaded gasoline from sales during the past 10 months. MONTH November December January February March Apr ! May June Ju!y Au%u&# Gasoline Demanded &#allons( 800 725 630 500 645 690 730 810 1200 980

a. 6ompute an e+ponentially smoothed forecast using @ A /.7 and F0 A 2//. !. 6ompute the error of each month and find the average error for the past record. c. orecast the demand for the coming month "ep#ember$

&(. Iuarterly data for the failures of certain aircraft engines at a local military !ase during the last

two years are %uarters En#ine ?ailures

1 2 & " 5 ( / ' 200 250 1/5 1'( 225 2'5 &05 1#0 a5 Determine one-step-ahead forecasts for periods " and ' using #hree'per o( mov n% avera%e& me#ho($ !5 Det us assume that the forecast for period 1 was 200. Also suppose that 8 0.1. Determine one-step-ahead forecasts for periods 2 and '. c5 6ompare the a!ove mentioned methods for the periods " and '. 1ased on this comparison conclude which method is a superior method for the given series.

&2
&/. 1icycle sales at 00Fs 1i*es are shown !elow. <ee= 1 2 & " 5 ( A)tual Bi) )le Sales ' 10 # 11 10 1&

a5 3se &-wee* moving average for forecasting wee* "% wee* 5% wee* ( and wee* /. !5 )f <ei#*ts A++lied Period & last wee* 2 2 wee*s ago 1 & wee*s ago orecast the wee*s "% 5% ( and /. c5 Chich method would you prefer and whyB d5 3se e+ponential smoothing to forecast !i*e sales. Assume that the forecast for Cee* 1 was # and O 8 0./. &'. 0he sales manager of a large apartment rental comple+ feels the demand for apartments may !e related to the num!er of newspaper ads placed during the previous month. :he has collected the data shown in the accompanying ta!le. Ads Pur)*ased 15 # "0 20 25 25 15 &5 a. !. c. d. e. f. &#. A+artments leased ( " 1( ( 1& # 10 1(

ind the mathematical e=uation !y using the least s=uares regression approach. )f the num!er of ads is &0% estimate the num!er of apartments leased. >iven the data on ads and apartment rentals as a!ove% compute the standard deviation of regression 7:y+5. 6ompute the correlation coefficient and interpret. 6ompute the determination coefficient and interpret. 0est the hypothesis% i.e. r 8 0 % at 5? level of significance

>iven !elow are 2 years of =uarterly demand data for a particular model of personal computer from a local computer store.

&&
&ear 2005 Quarter ) )) ))) ); ) )) ))) ); Demand "0 "( &# "2 "" 5/ "& "5

200(

a5 DeseasonaliAe the data with a moving total and compute a linear e=uation for the trend in demand. !5 3sing the trend you have developed% compute a forecast for the demand in each =uarters of the following year. "0. 1us and su!way ridership for the summer month in Dondon% 2ngland% is !elieved to !e tied heavily to the num!er of tourists visiting the city. During the past 12 years% the following data have !een o!tained. &"A1 69> 98 T9%1:!T! (in millions) / 2 ( " 1" 15 1( 12 1" 20 15 / 1&2 1:D"1!?:0 (in millions) 1.5 1.0 1.& 1.5 2.5 2./ 2." 2.0 2./ "." &." 1./ 2/.1 "# " &( 1( 1#( 225 25( 1"" 1#( "00 225 "# 1/#( 2.25 1.00 1.(# 2.25 (.25 /.2# 5./( ".00 /.2# 1#.&( 11.5( 2.'# /1.5# -<<<<<<<< 10.5 2.0 /.' (.0 &5.0 "0.5 &'." 2".0 &/.' ''.0 51.0 11.# &52.#

1##1 1##2 1##& 1##" 1##5 1##( 1##/ 1##' 1### 2000 2001 2002 0K0AD: a. e=uation. !. c. d. e.

3se the normal e=uations to develop a linear regression e=uation for forecasting the num!er of ridership on the !asis of the num!er of tourists. :tate the 3se the e=uation to forecast the num!er of ridership when the num!er of tourists visit Dondon in a year is 10 million. 2+plain the predicted ridership if there are no tourists at all. Assuming n is large% calculate the #5.5 percent confidence limits for the num!er of ridership when the num!er of tourists is 10 million. Chat is the correlation coefficient !etween num!er of ridership and the num!er of touristsB )nterpret your result.

&"

f. g. "1.

Chat percentage of the variation in the num!er of ridership is e+plained !y the tourist levelB )s the correlation significant at the 5? levelB

:ales of ;ol*swagenFs 1eetle have grown steadily at auto dealership in )stan!ul during the past 5 years 7see the ta!le !elow5. $ear 1### 2000 2001 2002 200& Sales "50 "#5 51' 5(& 5'"

a5 0he sales manager had predicted in 1##' that 1### sales 7 15 would !e "10 ;C:. 3sing e+ponential smoothing with a weight of O 8 0.&0% develop forecast for 2000 through 200". !5 3se a &-year moving average to forecast the sales of ;C !eetles in )stan!ul through 200". c5 Chich method you would use% e+ponential smoothing with O 8 0.& or a &-year moving average. 73se average errors5 d5 According to the method you have chosen% forecast 200" sales. "2. $ear 2005 %uarter ) )) ))) ); Demand &Units( #2 '2 '" #2

) #0 )) '0 ))) '2 ); #" 6ompute a forecast for the demand in each of the =uarters of the following year% 200/. "&. ollowing are the actual ta!ulated demands for an item for a nine-month period% from January through :eptem!er. Hour supervisor wants to test three forecasting methods to see which method was !etter over this period. Mont* January February March Apr ! May June A)tual Demand 110 130 150 170 160 180

200(

&5
Ju!y Au%u&# "ep#ember a. !. c. d. "". 140 130 140

orecast April through :eptem!er using a &-month simple moving average. 3sing a weighted moving average with weights (% &% 1 from recent to oldest% forecast April through :eptem!er. 3se simple e+ponential smoothing to estimate April through :eptem!er 7@ A /.7( and assume that the forecast for $arch was 1&0. 3se a!solute errors to decide which method produced !e !etter forecast over the si+-month period.

Dumlupinar :ports 6lu! wants to develop its !udget for the coming year using a forecast for foot!all attendance. oot!all attendance accounts for the largest portion of its revenues% and the ;ice Director $r. 0. 0urgay !elieves attendance is directly related to the num7er of wins 7y the team> 0he ;ice Director has accumulated total attendance figures for the last eight months. @:6! " ( ( ' ( / 5 / a5 !5 c5 d5 e5 ATT"6DA6/" & (&0 " 010 " 120 5 &00 " "00 " 5(0 & #00 " /50 Develop a simple regression e=uation. orecast attendance for at least / wins ne+t year. )f , r A /.165 ,% what is the coefficient of determination. )nterpret !oth. 0est the correlation coefficient at 5 ? level of significance. )s the correlation coefficient significant 7meaningful5 at this levelB

3sing correlation coefficient find regression e=uation and e+plain the difference !etween two regression e=uations you have calculated. f5 6alculate standard deviation of regression e=uation.

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