Month Year Demand (lbs)

Jan 2012 584

Feb 2012 552
2,000
Mar 2012 544
Apr 2012 576
May 2012 585
Jun 2012 784
Jul 2012 1,026
Aug 2012 1,098 1,500
Sep 2012 666
Oct 2012 504
Nov 2012 576

Demand (lbs)
Dec 2012 1,224
Jan 2013 720 1,000
Feb 2013 729
Mar 2013 747
Apr 2013 621
May 2013 819
Jun 2013 1,260 500
Jul 2013 1,368
Aug 2013 1,530
Sep 2013 873
Oct 2013 976
Nov 2013 624
-
Dec 2013 1,416

May
Jan

Feb

Jun

Sep
Mar

Apr

Oct
Jul

Aug
Jan 2014 855
Feb 2014 528
Mar 2014 729
Apr 2014 800
May 2014 744
Jun 2014 928
Jul 2014 1,560
Aug 2014 1,746
Sep 2014 909
Oct 2014 1,773
Nov 2014 2,000
Dec 2014 1,512

Q1 (a)
There is a positive trend, evident from the trend line over the course of 3 years
(b)
It appears that there is some sort of seasonlity effect. Demand increases in July, August and then goes down. Al
(c)
1. Naive Model
Demand for January 2015 = Demand for December 2014 = 1,512

2. Cumulative Model
957.94

3. 12 Period Moving Average

1,173.67
 Nov

May

Nov

May
Jun

Sep

Jan

Feb

Jun

Sep

Jan

Feb

Jun
Mar

Apr

Mar

Apr
Dec

Dec
Oct

Oct
Jul

Jul

Jul
Aug

Aug

Months

t and then goes down. Along with that a sudden spike can be observed in Dec.
Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec
 Cumulative Model
Month Year Demand (lbs) Error Error squared MSE RMSE
Jan 2012 584 (373.94) 139,831.12 163,551.05 404.41
Feb 2012 552 (405.94) 164,787.28
Mar 2012 544 (413.94) 171,346.32
Apr 2012 576 (381.94) 145,878.16
May 2012 585 (372.94) 139,084.24
Jun 2012 784 (173.94) 30,255.12
Jul 2012 1,026 68.06 4,632.16
Aug 2012 1,098 140.06 19,616.80
Sep 2012 666 (291.94) 85,228.96
Oct 2012 504 (453.94) 206,061.52
Nov 2012 576 (381.94) 145,878.16
Dec 2012 1,224 266.06 70,787.92
Jan 2013 720 (237.94) 56,615.44
Feb 2013 729 (228.94) 52,413.52
Mar 2013 747 (210.94) 44,495.68
Apr 2013 621 (336.94) 113,528.56
May 2013 819 (138.94) 19,304.32
Jun 2013 1,260 302.06 91,240.24
Jul 2013 1,368 410.06 168,149.20
Aug 2013 1,530 572.06 327,252.64
Sep 2013 873 (84.94) 7,214.80
Oct 2013 976 18.06 326.16
Nov 2013 624 (333.94) 111,515.92
Dec 2013 1,416 458.06 209,818.96
Jan 2014 855 (102.94) 10,596.64
Feb 2014 528 (429.94) 184,848.40
Mar 2014 729 (228.94) 52,413.52
Apr 2014 800 (157.94) 24,945.04
May 2014 744 (213.94) 45,770.32
Jun 2014 928 (29.94) 896.40
Jul 2014 1,560 602.06 362,476.24
Aug 2014 1,746 788.06 621,038.56
Sep 2014 909 (48.94) 2,395.12
Oct 2014 1,773 815.06 664,322.80
Nov 2014 2,000 1,042.06 1,085,889.04
Dec 2014 1,512 554.06 306,982.48

Cumulative Demand 957.94

12 Period Moving
Avg 1,173.67

(e)
None of these models are taking in to consideration the seasonality effect. Therefore none of these models are corr
 12 Period Moving Average
Error Error squared MSE RMSE
(589.67) 347,710.71 210,088.57 458.35
(621.67) 386,473.59
(629.67) 396,484.31
(597.67) 357,209.43
(588.67) 346,532.37
(389.67) 151,842.71
(147.67) 21,806.43
(75.67) 5,725.95
(507.67) 257,728.83
(669.67) 448,457.91
(597.67) 357,209.43
50.33 2,533.11
(453.67) 205,816.47
(444.67) 197,731.41
(426.67) 182,047.29
(552.67) 305,444.13
(354.67) 125,790.81
86.33 7,452.87
194.33 37,764.15
356.33 126,971.07
(300.67) 90,402.45
(197.67) 39,073.43
(549.67) 302,137.11
242.33 58,723.83
(318.67) 101,550.57
(645.67) 416,889.75
(444.67) 197,731.41
(373.67) 139,629.27
(429.67) 184,616.31
(245.67) 60,353.75
386.33 149,250.87
572.33 327,561.63
(264.67) 70,050.21
599.33 359,196.45
826.33 682,821.27
338.33 114,467.19
of these models are correct for prediction.
 Store ID x (Hrs.) Revenue in 1000 USD City
1 40 762 A
2 44 986 A
3 48 1,088 A
4 54 1,045 A
5 60 1,070 A
6 70 1,199 A
7 72 995 A
8 100 1,210 A
9 160 1,579 A
10 168 1,847 A

(a) βo 660.2031
β1 6.3468

weekly revenue= 660.2031 + 6.3468 (hours open)

(b) adjusted R2 0.8762

This adjusted R2 value is very reliable in terms of regression model. It

means that our model very strong predicting capability. However there are
only 10 data points with a large standard error. More data points would
result in better regression model
SUMMARY OUTPUT

Regression Statistics
Multiple R 0.9433765007
R Square 0.889959222
Adjusted R Square 0.8762041248
Standard Error 110.68655038
Observations 10

ANOVA
df SS MS F Significance F
Regression 1 792676.80052 792676.80052 64.700322081 4.1989938E-05
Residual 8 98012.0994796 12251.512435
Total 9 890688.9

Coefficients Standard Error t Stat P-value Lower 95%

Intercept 660.20306529 73.2849433709 9.00871359 1.83998E-05 491.20768283
X Variable 1 6.3467761607 0.78904170852 8.0436510417 4.198994E-05 4.527242718
 Upper 95% Lower 95.0% Upper 95.0%
829.19844775 491.20768283 829.19844775
8.1663096033 4.527242718 8.1663096033