Create causal regression model using pmi as causal variable

Assignment Help Supply Chain Management

Reference no: EM13897064

Many supply managers use a monthly reported survey result known as the purchasing managers' index (PMI) as a leading indicator to forecast future sales for their businesses. Suppose that the PMI and your business sales data for the last 10 months are the following:

Month:	1	2	3	4	5	6	7	8	9	10
PMI:	42.1	43.0	41.0	38.2	40.2	44.1	45.8	49.0	48.7	52.0
Sales (1000s):	121	123	125	120	118	118	122	127	135	136

a. Construct a causal regression model using PMI as the causal variable. How well does your model fit the data?

b. Suppose that the PMI is truly a leading indicator. That is, the PMI value in one period influences sales in the following period. Construct a new regression model using this information. Is the new model better or worse than the model you made for part a?

c. Pick the best model from parts a and b, and create a forecast for sales given PMI 5 47.3.

Text Book: Managing Operation Across the Supply Chain 2^nd Edition.

Reference no: EM13897064

Questions Cloud

Compute the seasonal indexes using the average demand : Compute the seasonal indexes using the average demand in each cycle as the base. Compute the seasonal indexes using regression estimates as the base.

Selected comparative financial statement information : Selected comparative financial statement information of Bluegrass Corporation follows.

Does prohibition on filming violate the 1st amendment right : Does the prohibition on filming violate the 1st Amendment right to freedom of speech? Explain your answer by applying the property legal standard to the facts above.

What is the current earned value for jlb construction : What is the current earned value for JLB Construction to date?

Create causal regression model using pmi as causal variable : Construct a causal regression model using PMI as the causal variable. How well does your model fit the data? Suppose that the PMI is truly a leading indicator.

Identify the main issue in dispute : Identify issues(s) what are all of the issues, identify the main issue in dispute , which issues will you focus on and which issues will you ignore?

What value of a is wamaco corp use in its forecasting model : What value of a is Wamaco Corp using in its forecasting model? Calculate the forecast for period 7 for product 1 and product 2.

Price elasticity of demand and income elasticity of demand : The demand function for bicycles in Holland has been estimated to be. Where Y is income in thousands of euros, Q is the quantity demanded in units, and P is the price per unit. When P = 150 euros & Y = 15(000) euros, determine the following: Price el..

Assumptions about the distribution of bidders valuations : Consider a first-price sealed-bid auction with three players: Betsy (B), Daniel (D) and Michael (M). Their valuations are vB = 100, vD = 90, and vM = 30, respectively. If their bids are bB = 90, bD = 30, and bM = 0, respectively, show that this NOT a..

User Account

All Pages