7045SSL : Critically analyse and interpret the outputs of data mining models and forecasting results for end-users.

Business analytics and Intelligence

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.

Task One-Business analytics concepts

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

Task Two- Marketing Analytics
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.

Task Three- Forecasting
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.