Question

The “Economic Report to the President of the United States” included data on the amounts of manufacturers’ new and unfilled orders in millions of dollars. Shown here are the figures for new orders over a 21-year period. GB513: Business Analytics 3 of 6 Use the charting tool in Excel to develop a regression model to fit the trend effects for the data. Use a linear model and then try a polynomial (order 2) model. Make sure the charts show the line formula and the r-squared value. Include both charts in your report. Then, answer the following question: ● How well does either model fit the data? Which model should be used for forecasting? Explain using the relevant metrics. Year Total Number of New Orders 1 55,022 2 55,921 3 64,182 4 76,003 5 87,327 6 85,139 7 99,513 8 115,109 9 116,251 10 121,547 11 123,321 12 141,200 13 162,140 14 168,420 15 171,250 16 176,355 17 195,204 18 209,389 19 237,025 20 272,544 21 293,475

Answer 1

Answer:

Use the Charting tool in Excel to develop a regression model to fit the trend effects for these data. Use a linear model and then try a polynomial (order 2) model.

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Make sure the charts show the line formula and the r-squared value. Include both charts in your report. Then answer the following question:

How well does either model fit the data?

A polynomial (order 2) model is more fitted the data

Which model should be used for forecasting? Explain using the relevant metrics.

A polynomial (order 2) model should be used for forecasting.

Regression output					confidence interval
variables	coefficients	std. error	t (df=18)	p-value	95% lower	95% upper
Intercept	60,778.6680
t	3,020.8460	1,413.6458	2.137	.0466	50.8865	5,990.8055