This paper aims to advice the manager of WidgeCorp who is considering branching out into cold beverages on how to forecast monthly sales of cold beverages for the next year. In doing so, the company need to come up with a regression model to forecast monthly sale of cold beverages for the next one year. Forecasting presents a helpful means for a firm to plan and prepare the selling of their products for the upcoming years. This makes it essential for a business to conduct proper planning before rolling out new products (ReliaSoft Corporation, 2008). This makes it important for WidgeCorp to consider regression model to estimate the monthly sales for these products for the upcoming years. This also requires considering the variables that WidgeCorp should consider when forecasting monthly sales of the cold beverage for next year.
For the company to come up with a regression model, the data for formulating the model must come from a sample of consumers. To draw a connection from these gathered data, WidgeCorp must transform the data into a straight-line graph. For instance, WidgeCorp can get a sample of consumer preference for cold beverages by conducting a survey to ascertain an ideal type of brand of cold beverage each prefers. Next step would involve predicting consumer preferences in relation to cold beverage products, and WidgeCorp would base its selling of cold beverage products on consumer preference of the samples taken.
The variables that WidgeCorp would use are Y and X, where Y would be independent variable while X is dependent variable. Y would be used to predict the preferred cold beverage that may be sold, while X would be the observed value of the prediction variable. The aim of this regression would be to come up with a model that will predict brand of cold beverages that consumers prefer and the observed amount that consumers would likely buy from WidgeCorp.
The regression model for WidgeCorp will comprise of a function illustrating how variable Y relates to variable X. With that in mind, WidgeCorp will forecast by starting with some assumption based on knowledge, experience, and judgment of the chosen forecaster. For successful implementation, WidgeCorp must align their resources, capacity, and products to the anticipated market demand. The success of WidgeCorp depends on its ability to forecast accurately (Stroud, 2008).
References:
ReliaSoft Corporation, (2008). Simple linear regression analysis. Retrieved on September 04, 2013 from http://www.weibull.com/DOEWeb/simple_linear_regression_analysis.htm
Stroud, J. D. (2008). Challenges of discrete and attribute data measurement. Retrieved on September 04, 2013 from http://finance.isixsigma.com/library/content/c06062
