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It only needs to be 4 o5 5 pages doubles space and you must have access to the software at RISK to use the one variable at StatTools unless you know how to navigate without it.
please see both files for details
(
Tech
Tierra
)
Tech Tierra – Forecasting for Future Growth
An individual case study report
Created by Dr. Phillip S. Rokicki
For use in Qnt.5040
All rights reserved
Tech Tierra – The Company and the Challenge
Millie Granger and Jose Mendes, friends and fellow graduates from Texas Tech in electrical engineering had a great idea as students. They noticed in Texas, with large numbers of Hispanic families, that often parents and grandparents of tech-savvy teenagers and young adults, were often left out of the technology decision-making process. When they studied at the Lubbock school they often wondered if they could create a company that would bridge the gap of not concentrating on the older Hispanics who most often funded the purchases of their younger children and grandchildren. Thus
Tech Tierra
was born.
The Company
Founded in mid-2004, the company began with a single store in Lubbock, with growth of a store every year concentrating on these older, but more financial secure Hispanic families. Now the company has eight stores in Lubbock, Austin, San Antonio, Houston, and is considering expanding into the Dallas area.
The current store chain has done well over the years as can be seen by their monthly sales figures. Jose is the Executive Vice President of Operations and Millie is the CEO/President of the company mainly concentrating on expansion, franchising, finance, and corporation relations. They have been a successful team over these past years.
The Challenge
Jose has as part of his duties the responsibility for forecasting growth. He has a remarkable record of predicting the monthly and annual growth of the company. He has managed to forecast the operating income and expenditures within 7 percent each and every year. Thus, Millie has grown to depend on Jose’s annual forecasts.
Jose has informed Millie that he has been offered a corporate presidency of a larger chain of electronics stores in California and will be leaving immediately. While the California stores sell similar merchandise as Tech Tierra, they do not operate outside of the state, so they are not in direct competition with the Texas stores, and in violation of Jose’s non-compete agreement.
Jose has not yet completed his forecast for the remainder of 2013 and for the 8 months of 2014 (they do a 12 month forecast each August for the next 12 months). But he has given Millie a brief run down as to what he does to create the forecast, but she feels unsure if she knows what to do.
Millie has hired you, a locally known economic forecaster, to provide her with a 12 month forecast for Tech Tierra. For this forcast you will be paid $50,000 now and if your forecast proves to be accurate in 12 months (within 10 percent of the actual) you will paid an additional $50,000 bonus. You will be allowed to adjust the forecast once, during the 6th month, to reflect any changes in the economy that may occur. So it is to your own benefit to create an accurate forecast.
Your Task and the Rules
You are to create a 12 month forecast, from September 2013 through August 2014for Tech Tierrathat uses the following forecasting techniques:
1. The one variable summary in StatTools.
2. The runs test to determine if the data is random or not.
3. The annual box and whisker plot.
4. The moving average with a span of 3.
5. The simple exponential smoothing forecast.
6. The Holtz linear method for trends.
7. The Winters method for trends and seasonality.
To decide which of these has the best forecast probability you will concentrate on the following results as provided by the software:
1. The root mean square error (RMSE)
2. The mean absolute percentage of error (MAPE)
Important things you need to know
1. The company’s fiscal year goes from February of one year to January of the next year.
Your Tasks
1. Carry out the various statistical tests as indicated above.
2. Analyze the resulting data, and determine which of the forecasting techniques provides the best forecast, and why.
3. Report on each of these forecasting techniques in your report, explaining what you did, what you found out, and how you decided which forecast is the best.
4. Forecast the next twelve months of sales for Tech Tierra.
5. Submit your individual report on time.
Write a management report (using the required format) suggesting and justifying an appropriate decision regarding the sales forecast. In your report, analyze the patterns of the monthly time series; discuss the properties of each forecasting model and their relevance to predicting the series; select the best forecasting model for the series; make your recommendations supported by arguments which are further supported by references to model results and tables or figures in your report. Independent outside research is encouraged to provide relevant background information and/ or to provide more support for your arguments.
Please, embed your Excel spreadsheet showing the appropriate calculations and charts into the Appendix section of your report.
Scatterplot of Yearly Totals vs Year of Tech Tierra 1
2005 2006 2007 2008 2009 2010 2011 2012 2013 92665 104133 117403 134133 146312 158339 156975 176501 109489
Year / Tech Tierra 1
Yearly Totals / Tech Tierra 1
Copyright R&A 2013 Page 1
>Monthly one column
05
to /1/05
632
3
Sales in dollars per month Year 6979 6962 7606 7909 8504 7977 7816 6520 8525 9510 12079 13746 2006 8225 8164 9324 8820 9313 9419 8700 6960 9091 10933 13117 15337 2007 11267 8889 9612 10511 10571 10644 9766 7672 11016 11802 14923 17460 2008 10053 10807 10713 10731 11344 11510 10725 8395 11983 14028 17202 18821 2009 11098 11089 11730 11534 12323 12067 10893 9137 12805 14612 18844 22207 2010 10272 10602 11156 11602 10791 11970 12269 9686 13442 14774 18460 21951 2011 12287 11519 12767 13235 13643 13552 13349 10240 14781 17123 20396 23609 2012 14031 13109 14248 14468 14250 15024 13837 10522 2013 0
Tech Tierra Product
Sales
2
0
Date
Sales in dollars per month
Date Sales
1
6
2/1/05
65
4
3/1/05
6675
4/1/05
6692
5/1/05
6984
6/1/05
7133
7/1/05
6385
8/1/05
7364
9/1/05
7171
10/1/05
8790
11/1/05
10299
12/1/05
11997
1/1/06
6979
2/1/06
6962
3/1/06
7606
4/1/06
7909
5/1/06
8504
6/1/06
7977
7/1/06
7816
8/1/06
6520
9/1/06
8525
10/1/06
9510
11/1/06
12079
12/1/06
13746
1/1/07
8225
2/1/07
8164
3/1/07
9324
4/1/07
8820
5/1/07
9313
6/1/07
9419
7/1/07
8700
8/1/07
6960
9/1/07
9091
10/1/07
10933
11/1/07
13117
12/1/07
15337
1/1/08
11267
2/1/08
8889
3/1/08
9612
4/1/08
10511
5/1/08
10571
6/1/08
10644
7/1/08
9766
8/1/08
7672
9/1/08
11016
10/1/08
11802
11/1/08
14923
12/1/08
17460
1/1/09
10053
2/1/09
10807
3/1/09
10713
4/1/09
10731
5/1/09
11344
6/1/09
11510
7/1/09
10725
8/1/09
8395
9/1/09
11983
10/1/09
14028
11/1/09
17202
12/1/09
18821
1/1/10
11098
2/1/10
11089
3/1/10
11730
4/1/10
11534
5/1/10
12323
6/1/10
12067
7/1/10
10893
8/1/10
9137
9/1/10
12805
10/1/10
14612
11/1/10
18844
12/1/10
22207
1/1/11
10272
2/1/11
10602
3/1/11
11156
4/1/11
11602
5/1/11
10791
6/1/11
11970
7/1/11
12269
8/1/11
9686
9/1/11
13442
10/1/11
14774
11/1/11
18460
12/1/11
21951
1/1/12
12287
2/1/12
11519
3/1/12
12767
4/1/12
13235
5/1/12
13643
6/1/12
13552
7/1/12
13349
8/1/12
10240
9/1/12
14781
10/1/12
17123
11/1/12
20396
12/1/12
23609
1/1/13
14031
2/1/13
13109
3/1/13
14248
4/1/13
14468
5/1/13
14250
6/1/13
15024
7/1/13
13837
8/1/13
10522
9/1/13
10/1/13
11/1/13
12/1/13
1/1/14
2/1/14
3/1/14
4/1/14
5/1/14
6/1/14
7/1/14
8/1/14
Forecast
Months
Monthly in rows
Tech Tierra Product Sales 2005 to Date
Year
Jan
Feb
March
April
May
June
July
August
September
October
November
December
Yearly Totals
2005 6632 6543 6675 6692 6984 7133 6385 7364 7171 8790 10299 11997 2005
92,665
2006
104,133
2007
117,403
2008
134,133
2009
146,312
2010
158,339
2011
156,975
2012
176,501
2013
109,489
2014
Forecast
Months
Sheet3
_STDS_
| Name | Tech Tierra 1 | StatTools Version that generated sheet, Major | StatTools Version that generated sheet, Minor | StatTools Version that generated sheet, Revision | Min. StatTools Version to Read Sheet, Major (note ST versions before 1.1.1 don’t perform forward compatibility check) | Min. StatTools Version to Read Sheet, Minor | Min. StatTools Version to Read Sheet, Revision | Min. StatTools version to not put up warning about extra info, Major | Min. StatTools version to not put up warning about extra info, Minor | Min. StatTools version to not put up warning about extra info, Revision |
| GUID | ||||||||||
| Format Range | FALSE | |||||||||
| Variable Layout | Columns | |||||||||
| Variable Names In Cells | TRUE | |||||||||
| Variable Names In 2nd Cells | ||||||||||
| Data Set Ranges | ERROR:#VALUE! | |||||||||
| Data Sheet Format | ||||||||||
| Formula Eval Cell | ||||||||||
| Num Stored Vars | ||||||||||
| 1 : Info | VG1BBE361D25C4DDCA | var1 | ST_Year | |||||||
| 1 : Ranges | ||||||||||
| 1 : MultiRefs | ||||||||||
| 2 : Info | VGC02619E1BE7A174 | var2 | ST_YearlyTotals | |||||||
| 2 : Ranges | ||||||||||
| 2 : MultiRefs |
