# Regression Linear Method Questions

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33:799:310 Demand Planning & Fulfillment
Homework 2 (3 Questions)
Question 1 (25 points)
Wayne Banker is in charge of planning water usage for agriculturally intensive
Burke County. August is the peak month of water usage for Burke County. Wayne
has collected the following statistics from the past 15 years, showing the total
MarchJune rainfall (in inches), average daily high temperature in July, and
number of acre-feet of water used in August by farms in the area. Wayne wants
to know if he can predict how much water will be needed in August, given the
MarchJune rainfall and July temperature data.
Inches of
Rainfall
Average Peak Acre-Feet of
Daily Temp, Water Used,
Year March-June
2005
12.5
2006
11.2
2007
12.2
2008
10.6
2009
9.3
2010
11.7
2011
10.0
2012
13.3
2013
8.4
2014
14.9
2015
10.0
2016
12.6
2017
10.6
2018
7.1
2019
11.3
July
78.4
74.9
84.1
85.1
70.6
71.0
87.4
91.4
98.3
99.6
91.7
91.6
81.5
77.0
83.9
August
39800
43700
45100
54500
32900
31500
35500
35800
69700
48100
53700
40300
32600
34100
36800
a) Use Excels regression function to develop a multiple regression forecast for
Wayne. Use the model to forecast water usage for 20052019.
b) Calculate the MFE, MSE, MAPE, and TS for the model. In your opinion, how
good is the model? Is the method in-control in all years?
1
33:799:310 Demand Planning & Fulfillment
Homework 2 (3 Questions)
Question 2 (25 points)
Your manager has come to you with the following data, showing actual demand
for five periods and forecast results for two different models.
Period
Actual Forecast Forecast
Demand Model 1 Model 2
1
2
3
4
5
248
357
423
286
444
364
280
349
416
354
486
341
295
364
380
He has asked you to tell him which forecast model is best and why.
a) Using MFE, MAD, MSE, and MAPE, tell him which model is best and why. Is
the proposed method in-control in all years?
Question 3 (30 points)
Forrest and Dan make boxes of chocolates for which the demand is uncertain.
Forrest says, Thats life. On the other hand, Dan believes that some demand
patterns exist that could be useful for planning the purchase of sugar, chocolate,
and shrimp. Forrest insists on placing a surprise chocolate-covered shrimp in
some boxes so that You never know what youll get.
Quarterly demand (in boxes of chocolates) for the last 3 years follows:
Quarter
Year 1
Year 2
Year 3
1
3,000
3,300
3,502
?
2
1,700
2,100
2,448
?
3
900
1,500
1,768
?
4
4,400
5,100
5,882
?
2
Year 4
33:799:310 Demand Planning & Fulfillment
Homework 2 (3 Questions)
a) Use intuition and judgment to estimate quarterly demand for the fourth
year.
b) Use the regression linear method with considering the multiplicative
seasonal index to prepare a forecast for each quarter of the year. Are any
of the quarterly forecasts different from what you thought you would get in
part (a)?
3