C D F G H I 3 B BUSI/BMIS 405 1 2 Chapter 8: Combining Forecast Results 1. Homework: Exercises 4, 5, and 6 3 4 5 6 Exercise 4: 7 c. Use regression analysis to combine two models (pp. 414-424): 8 1. Highlight "Loan Volume", "Regression Forecast Loan Volume" from 4a. and "Decomposition Forecast Loan Volume" from 4b. 9 The regression equation: Loan volume = b0 + bl(regression forecast) + b2(decomposition forecast) 10 Open Forecast X > Forecast Method > Choose "Multiple Regression" 11 Perform t-test on "Constant" term (b0) (See pp. 419-424, Forecasting Total Houses Sold With A Combined Forecast) 12 If absolute t- value for the constant is less than 2, the coefficient is no significant. 13 Run "Multiple Regression" again. 14 The regression equation: Loan volume = bl(regression forecast) + b2(decomposition forecast) 15 Forecast X > Forecast Method > Choose "Multiple Regression" > Click "advanced">Set "Constant is Zero" > Report > Audit > Finish The model with lower RMSE would be a better model. 16 17 18 Exercise 5: 19 This is a combined forecast exercise just like exercise 4. 20 Exercise 6: c. For an unbiased forecast, it would not consistently overestimate or underestimate the actual value (p.404) If two individual forecasts are free of systematic bias, the values of bl and b2 will sim roughly to 1 (p.415) 21 22 UGUSIN 23 24 25 26 27 A E K