Aug 08, 2023

Assignment Brief - Mode E and R Regulations

Learning outcome 1: Define and evaluate key concepts of business analytics.
Learning outcome 2: Critically apply business analytics skills for decision making.
Learning outcome 3: Critically analyse and interpret the outputs of data mining models and forecasting results for end-users.
Learning outcome 4: Solve managerial problems and make systematic decisions by applying business data analysis techniques.
Learning outcome 5: Have ability to apply business analytics to various international business contexts by
selecting appropriate techniques.

a. Describe what you have learned about the Forecasting methods. Give a proper example for that
b. Critically discuss and analyse five published papers which have used forecasting with proper explanation. The technique, its application and the results need to be interpreted properly

By analyzing previous historical data for FitBit sale company, it can be seen that the sale volume has been changed according to its price in different periods. The values have been reported in the following table. This company is going to launch a new product and the price needs to be decided based on the market analysis. Determine the appropriate price for the new developed FitBit with the aim of maximizing the company`s profit. The demand of new product has a direct relationship to its price.

Table 1- Demands of FitBit based on a price level according to previous experiences

 Price (£) Demand 115 4150 118 4070 121 3730 126 3420 126 3170 129 3020 131 2700 136 2550 136 2460 138 2400 141 2310 144 2220 146 2160 148 2140 151 2100 154 2080

The main objective of the company is to maximize profit regarding to the new product. It is assumed that the unit production and supply cost of each FitBit is £76, so the profit of each unit will be (the sale price - unit production cost).
a) Use Excel to determine the estimated demand quadratic equation function and describe why quadratic form is preferred.
b) Use Excel solver to find the optimal price which maximizes the company`s profit.
c) Determine the optimal demand.
d) Compute the optimal profit.
e) Interpret the results.
f) If the supply cost of each FitBit is £67 and then £87 determine the optimal price and interpret the results appropriately.
g) Suppose that the supply cost is £87 and the company has decided to set the price less than £130, then what will be the optimal price? Interpret the results.

Suppose that you have gathered sales data of above company from 2015-2021 in different quarters. You are going to consider the company sales value and to forecast the company amount of sales in 2021 in different quarters. Look at the gathered data of previous years related to the amount of sales in each quarter which have been reported in Table 2.

Table 2- Data of amount of sales among previous years

 Year Q Revenue Four Moving average Baseline Seasonality Deseasonality Trend Forecast Error MAD Error MSE MAPE 2015 Q1 1920 2015 Q2 2910 2015 Q3 4630 2015 Q4 2520 2016 Q1 2100 2016 Q2 3120 2016 Q3 5050 2016 Q4 2570 2017 Q1 2250 2017 Q2 3240 2017 Q3 5230 2017 Q4 2640 2018 Q1 2360 2018 Q2 3430 2018 Q3 5600 2018 Q4 2880 2019 Q1 2590 2019 Q2 3790 2019 Q3 6220 2019 Q4 3150 2020 Q1 2810 2020 Q2 4050 2020 Q3 6560 2020 Q4 3320 2021 Q1 2940 2021 Q2 4280 2021 Q3 6900 2021 Q4 3440

a. Plot the data and describe the main features of the series.
b. Compute the four-period moving average and enter your values in the appropriate columns. Calculate the Centered Moving Average (CMA)/Baseline. Interpret it.
c. Calculate the Trend and interpret the trend.
d. Determine the Seasonality (St) and interpret it properly.
e. Forecast the revenue for 8th year.
f. Calculate the Error, mean absolute percentage error (MAPE), Mean Square Error (MSE) and Mean Absolute Deviation (MAD).
g. Write a brief report to explain and evaluate and make comments on the error variables, the forecasted and actual revenues.

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