DVD Express is a large manufacturer of affordable DVD players. Management recently became aware of rising costs resulting from returns of malfunctioning products. As a starting point for further analysis, Bonnie Lee, the controller, wants to test different forecasting methods and then use the best one to forecast quarterly expenses for 2020. The relevant data for the previous three years follows: 2017 Quarter Return Expenses 2018 Quarter Return Expenses 2019 Quarter Return Expenses 1 2 3 4 $15,000 17,500 18,500 18,600 1 2 3 4 $16,200 17,800 18,800 17,700 1 2 3 $16,600 18,100 19,000 19,200 4 The result of a simple regression analysis using all 12 data points yielded an intercept of $16,559.09 and a coefficient for the independent variable of $183.22 (R-squared = .27, t = 1.94, SE = 1128). a. b. Calculate the quarterly forecast for 2020 using the high-low method and regression analyses. Recommend which method Bonnie should use. (15 marks) How does your analysis in requirement a. change if DVD Express manufactures its products in multiple global production facilities to serve the global market? (5 marks) How do we know when high correlation exists? Explain whether high correlation is the same as cause and effect? (5 marks) C. DVD Express is a large manufacturer of affordable DVD players. Management recently became aware of rising costs resulting from returns of malfunctioning products. As a starting point for further analysis, Bonnie Lee, the controller, wants to test different forecasting methods and then use the best one to forecast quarterly expenses for 2020. The relevant data for the previous three years follows: 2017 Quarter Return Expenses 2018 Quarter Return Expenses 2019 Quarter Return Expenses 1 2 3 4 $15,000 17,500 18,500 18,600 1 2 3 4 $16,200 17,800 18,800 17,700 1 2 3 $16,600 18,100 19,000 19,200 4 The result of a simple regression analysis using all 12 data points yielded an intercept of $16,559.09 and a coefficient for the independent variable of $183.22 (R-squared = .27, t = 1.94, SE = 1128). a. b. Calculate the quarterly forecast for 2020 using the high-low method and regression analyses. Recommend which method Bonnie should use. (15 marks) How does your analysis in requirement a. change if DVD Express manufactures its products in multiple global production facilities to serve the global market? (5 marks) How do we know when high correlation exists? Explain whether high correlation is the same as cause and effect? (5 marks) C