Jensen Tire & Auto is deciding whether to purchase a maintenance contract

for its new computer wheel alignment and balancing machine. Managers feel
that maintenance expense should be related to usage, and they collected the
following information on weekly usage (hours) and annual maintenance
expense (in hundreds of dollars)
Annual
Weekly Maintenanc
usage e Expense
(hours) ($100s)
13 17.0
10 22.0
20 30.0
28 37.0
32 47.0
17 30.5
24 32.5
31 39.0
40 51.5
38 40.0

a.

Annual maintenance
60

50
f(x) = 0.95344043969982 x + 10.5279568755945
R² = 0.85617674884271
40

30

20

10

0
5 10 15 20 25 30 35 40 45
 10

0
5 10 15 20 25 30 35 40 45

Y = 0.9534x + 10.528
R^2 = 85.62%
85.62% of the variation is explained by the model

SUMMARY OUTPUT

Regression Statistics
Multiple R 0.925298
R Square 0.856177
Adjusted R 0.838199
Standard E 4.249618
Observatio 10

ANOVA
df SS MS F Significance F
Regression 1 860.0509 860.0509 47.6238295 0.000124
Residual 8 144.4741 18.05926
Total 9 1004.525

Coefficients
Standard Error t Stat P-value Lower 95%Upper 95%Lower 95.0%
Upper 95.0%
Intercept 10.52796 3.744867 2.811303 0.02279724 1.892277 19.16364 1.892277 19.16364
X Variable 0.95344 0.13816 6.901002 0.0001244 0.634844 1.272037 0.634844 1.272037

b.

Test for a significant relationship at α = 0.05

Ho: β1 = 0
Ha: β1 ≠ 0
There is a significant relationship between expense and usage.
From the output in Part (a) it is found that the F-test statistic is 47.62
The level of significance is α = 0.05
P-value = 0.00
If the p-value ≤ α, then reject the null hypothesis
P-value (= 0.00) < α (= 0.05)
Thus, the decision is "reject the null hupothesis".
Therefore, the data provide sufficient evidence to conclude that
there is a significant relationship between expense and usage

c.

α/2 = 0.05 t(0.025) = According to the regression equation: y = 10.53+0.953x

Upper 95.0%
Prob 1.
Consider the following time series data:
WEEK 1 2 3 4 5 6
VALUE 18 13 16 11 17 14

Using the naïve method (most recent value) as the forecast for the next week, compute
the following measures of forecast accuracy:
a.Mean absolute error
b.Mean squared error
c.Mean absolute percentage error
d.What is the forecast for week 7?

a-b-c.
Absolute
Week Value Naïve Absolute Squared percentage
method error error
error
1 18
2 13 18 5 25 38%
3 16 13 3 9 19%
4 11 16 5 25 45%
5 17 11 6 36 35%
6 14 17 3 9 21%
14
4.4 20.8 32%
MAE MSE MAPE
d.
The forecast for week 7 is the value of week 6: 14
Prob 2.
Refer to the time series data in Problem 1. Using the average of all the historical data as
a forecast for the next period, compute the following measures of forecast accuracy:
a. Mean absolute error
b. Mean squared error
c. Mean absolute percentage error
d. What is the forecast for week 7?

Absolute
Forecast Absolute Squared
Week Value Forecast percentage
error error error
error
1 18
2 13 18 -5 5 25 38.46%
3 16 15.5 0.5 0.5 0.25 3.13%
4 11 15.666667 -4.6666667 4.6666667 21.7777778 42.42%
5 17 14.5 2.5 2.5 6.25 14.71%
6 14 15 -1 1 1 7.14%
14.833333
Total 13.666667 54.277778 105.86%

MAE MSE MAPE

 2.7333333 10.8555556 21.17%

The forecast for week 7 is: (18+13+16+11+17+14)/6 = 14.83333

Prob 3.
Exercise 1 Exercise 2
MAE 4.4 2.733
MSE 20.8 10.0856
MAPE 31.88% 21.17%

MAPE of Historical data < MAPE of Naïve mathod => historical data more accuracy

Consider the following time series data:

WEEK 1 2 3 4 5 6
VALUE 18 13 16 11 17 14
Prob 5.
a. Construct a time series plot. What type of pattern exists in the data?
b. Develop a three-week moving average for this time series. Compute MSE and a forecast for
week 7.
c. Use a=0.2 to compute the exponential smoothing values for the time series. Compute MSE and a
forecast for week 7.
d. Compare the three-week moving average forecast with the exponential smooth-ing forecast
using a=0.2. Which appears to provide the better forecast based on MSE? Explain.
e. Use trial and error to find a value of the exponential smoothing coefficient a that results in a
smaller MSE than what you calculated for a=0.2.
a.
WEEK VALUE
1 18 VALUE
2 13 20
3 16 18
4 11 16
14
5 17
12 VALUE
6 14 10
8
6
4
=> Horizontal pattern
2
0
0 1 2 3 4 5 6 7
b.
Three-week moving average (k=3) => input: value, interval: 3, output: bấm vào w2
Absolute
Foresat values of Squared
WEEK Value Forecast forecast
error forecast
error
error
1 18
2 13 #N/A
3 16 #N/A
4 11 15.666667 -4.67 4.67 21.78
5 17 13.333333 3.67 3.67 13.44
 6 14 14.666667 -0.67 0.67 0.44
7 14
11.89
c.
α = 0.2 => 1 - α = 0.8 => input: value, dumping factor: 0.8, output: w1
Absolute
Squared
Foresat values of
WEEK Value Forecast error forecast forecast
error
error
1 18 #N/A
2 13 18 -5 5 25
3 16 17 -1 1 1
4 11 16.8 -5.8 5.8 33.64
5 17 15.64 1.36 1.36 1.8496
6 14 15.912 -1.912 1.912 3.655744
7 15.5296
13.0290688
d.
MSE for three week moving average is 11,89 vs MSE for exponential smoothing is 13,03
MSE for three week moving average is less than the exponential smoothing. So, three
week moving average provides better forecast.
e.
Given a=0,5
WEEK VALUE FORECAST ERROR SQUARED ERROR

1 18
2 13 18 -5 25
3 16 15.5 0.5 0.25
4 11 15.75 -4.75 22.56
5 17 13.38 3.63 13.14
6 14 15.19 -1.19 1.41
TOTAL 62.36
MSE 12.47 <13,03

Given a=0,15
WEEK VALUE FORECAST ERROR SQUARED ERROR

1 18
2 13 18 -5 25
3 16 17.25 -1.25 1.56
4 11 17.06 -6.06 36.75
5 17 16.15 0.85 0.72
6 14 16.28 -2.28 5.2
TOTAL 69.23
MSE 13.85 >13,03
With a=0.5>0.2 then MSE = 12.47 < 13.03 = MSE(a=0.2)
With a=0.15<0.2, then MSE = 13.85 > 13.03 =MSE(a=0.2)
So we can conclude that as alpha increases MSE decreases, which infers
that the value of the exponential smoothing factor a > 0.2 results in a
smaller MSE
nd a forecast for

Compute MSE and a

ooth-ing forecast
lain.
a that results in a

VALUE

6 7
Eastman Publishing Company is considering publishing an electronic textbook about
spreadsheet applications for business. The fixed cost of manuscript preparation, text-
book design, and web site construction is estimated to be $160,000. Variable process-
ing costs are estimated to be $6 per book. The publisher plans to sell single-user access
to the book for $46.
a.
Build a spreadsheet model to calculate the profit/loss for a given demand. What
profit can be anticipated with a demand of 3,500 copies?
b.
Use a data table to vary demand from 1,000 to 6,000 in increments of 200 to assess
the sensitivity of profit to demand.
c.
Use Goal Seek to determine the access price per copy that the publisher must charge
to break even with a demand of 3,500 copies.
d.
Consider the following scenarios:

Scenario 1 Scenario 2 Scenario 3 Scenario 4 Scenario 5

Variable Cost/Book $6 $8 $12 $10 $11
Access Price $46 $50 $40 $50 $60
Demand 2500 1000 6000 5000 2000

For each of these scenarios, the fixed cost remains $160,000. Use Scenario Manager to
generate a summary report that gives the profit for each of these scenarios. Which sce-
nario yields the highest profit? Which scenario yields the lowest profit?

Scenario 1 Scenario 2 Scenario 3 Scenario 4 Scenario 5

Fixed Cost 160000 160000 160000 160000 160000
Variable Cost/Book 6 8 12 10 11
Access Price 46 50 40 50 60
Demand 2500 1000 6000 5000 2000
Profit/Loss -60000 -118000 8000 40000 -62000

a.
Revenue

Access price 46
Quantity demand 3500

Total revenue 161000 "=Quantity demand*Access price

Fixed cost 160000

Variable cost/unit 6

Total cost 181000

Profit/loss -20000

b.
-20000 -20000
 1000 1000
1200 1200
1400 1400
1600 1600
1800 1800
2000 2000
2200 2200
2400 2400
2600 2600
2800 2800
3000 3000
3200 3200
3400 3400
3600 3600
3800 3800
4000 4000
4200 4200
4400 4400
4600 4600
4800 4800
5000 5000
5200 5200
5400 5400
5600 5600
5800 5800
6000 6000

c.
Revenue

Access price 51.714286

Quantity demand 3500

Total revenue 181000

Fixed cost 160000

Variable cost/unit 6

Total cost 181000

Profit/loss 0
a.
Revenue
Let's assume the single-user access price is represented
by the variable p (in dollar)
Access price 46 The demand function is given as: 4000 - 6p
Quantity demand 3724
Single-User Access
Demand Profit/Loss
Total revenue 171304 Price (p)
46 3724 -11040
Fixed cost 160000
Variable cost/unit 6

Total cost 182344

Profit/loss -11040 c.
-11040
b. 50
75
Revenue 100
125
Access price 49.186255 150
Quantity demand 3704.8825 175
200
Total revenue 182229.29 225
250
Fixed cost 160000 275
Variable cost/unit 6 300
325
Total cost 182229.29 350
375
Profit/loss -6.35E-06 400
 OM 455
Section 001
Course grading scale based on course average
Lower limit Upper Limit Course Grade
0 59 F
60 69 D
70 79 C
80 89 B
90 100 A
b.
Last Name Midtern score Final score Course average Course grade Lower limit Upper Limit
Alt 70 56 63 D 0 59
Amini 95 91 93 A 60 69
Amoako 82 80 81 B 70 79
Apland 45 78 61.5 D 80 89
Bachman 68 45 56.5 F 90 100
Corder 91 98 94.5 A
Desi 87 74 80.5 B
Dransman 60 80 70 C
Duffuor 80 93 86.5 B
Finkel 97 98 97.5 A
Foster 90 91 90.5 A
Fuss 74 82 78 C
George 72 92 82 B
Gerson 83 76 79.5 C
Girling 61 66 63.5 D
Greer 95 100 97.5 A
Guerro 70 77 73.5 C
Hager 65 93 79 C
Heilman 82 88 85 B
Hibbard 95 94 94.5 A
Hills 62 57 59.5 F
Hughes 78 93 85.5 B
Hutchison 88 95 91.5 A
Jackson 85 100 92.5 A
Kassner 87 90 88.5 B
Kelcik 74 86 80 B
Kern 46 76 61 D
Kinner 55 86 70.5 C
 Lair 90 97 93.5 A
Marsh 88 96 92 A
Martini 67 88 77.5 C
Mattlin 78 84 81 B
McGough 74 78 76 C
Miller 65 80 72.5 C
Minnick 58 93 75.5 C
Minster 66 67 66.5 D
Mueller 68 93 80.5 B
Munzo 86 94 90 A
Nanko 83 96 89.5 B
Owen 54 78 66 D
Reth 70 86 78 C
Rezai 95 100 97.5 A
Ridder 81 79 80 B
Rodgers 87 97 92 A
Ruschau 72 90 81 B
Schneider 74 96 85 B
Schnirring 75 93 84 B
Schwartz 51 81 66 D
Scott 45 76 60.5 D
Shaw 63 87 75 C
Sims 74 68 71 C
Steelman 83 79 81 B
Trentman 65 72 68.5 D
Villaris 78 83 80.5 B
Wettee 64 61 62.5 D
Weyer 93 95 94 A
Whipky 88 90 89 B
Willis 90 95 92.5 A
Course Grade Num of stu
F 2
D 10
C 13
B 18
A 15