LINEAR REGRESSION AND SIMPLE EXPONENTIAL SMOOTHING (SES) FORECASTING

LINEAR REGRESSION AND SIMPLE EXPONENTIAL SMOOTHING (SES) FORECASTING.

Scenario: You are a consultant for the Diligent Consulting Group (DCG). You have completed the first assignment, developing and testing a forecasting method that uses Linear Regression (LR) techniques (Module 2 Case). However, the consulting manager at DCG wants to try a different forecasting method as well. Now you decide to try Single Exponential Smoothing (SES) to forecast sales.

Using this Excel template: Data chart for BUS520 SLP 2, do the following:

Calculate the MAPE for Year 2 Linear Regression forecast (use the first spreadsheet tab labeled “Year 2 Forecast – MAPE”).

Calculate forecasted sales for Year 2 using SES (use the second spreadsheet tab labeled “SES – MAPE”). Use 0.15 and 0.90 alphas.

Compare the MAPE calculated for the LR forecast (#1 above) with the MAPEs calculated using SES.

Then write a report to your boss in which you discuss the results obtained above. Using calculated MAPE values, make a recommendation concerning which method appears to be more accurate for the Year 2 data: SES or Linear Regression.

SLP Assignment Expectations

Analysis

Conduct accurate and complete SES analysis in Excel. You may also check the following link for your reference: https://support.office.com/en-US/article/data-analysis-7e71735c-c471-47e1-84ef-a8c23dc3098b

Written Report

• Length requirements: 2 – 3 pages minimum (not including Cover and Reference pages). NOTE: You must submit 2 – 3 pages of written discussion and analysis. This means that you should avoid use of tables and charts as “space fillers.”
• Provide a brief introduction to/background of the problem.
• Complete a written analysis that supports your Excel analysis, discussing the assumptions, rationale, and logic used to complete your SES forecast.
• Give complete, meaningful, and accurate recommendation(s) relating to whether LR or SES is more accurate in predicting sales.
• Write clearly, simply, and logically. Use double-spaced, black Verdana or Times Roman font in 12 pt. type size.
• Have an introduction at the beginning to introduce the topics and use keywords as headings to organize the report.
• Avoid redundancy and general statements such as “All organizations exist to make a profit.” Make every sentence count.
• Paraphrase the facts using your own words and ideas, employing quotes sparingly. Quotes, if absolutely necessary, should rarely exceed five words.
• Upload both your written report and Excel file.

LINEAR REGRESSION AND SIMPLE EXPONENTIAL SMOOTHING (SES) FORECASTING

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