Company vs Industry Forecast - Essay Example

Company and Industry Forecast Company Forecast and Industry Forecast Regression analysis Regression analysis for the forecasting of industry sales by market area is an important tool for prediction and comparison of values from the market areas selected. One can assess how variables correlate with one another. R2 The R2 computed ranged from 0.99998 to 0.99996, which gave approximately 99.99% indicated that the model explained the variability around the tested means at a higher confidence fit. The model is approximately 100% or 1, which showed a perfect fit between the variables tested. The R2 showed how the variables used (time, real GDP and average price) depended on each other. Therefore, using the finding for Merica 1, these parameters are tightly fitted to the regression line, besides; the relationship is positive and strongly related. For that reason, in every real GDP forecasted, time and average price are strongly and positively affecting the real GDP and vice-versa. Adjusted R2 The adjusted R2showed the total variability accounted by the model. This refers to the proportion of finding the variables that the model would account for, or the proportion the model can explain. For Merica 1, the adjusted R2 was 0.99996. The value indicated that a significant percentage of the variables could b explained by the model (99.996%). Coefficient of estimates The coefficient of determinant or estimate is defined as the rate at which conditional means change. Average price reported the highest changes in the conditional mean compared to other variables. However, time and real GDP reported negative value. Negative coefficient of determinants shows that the expected forecast of the dependent variable would be below zero when the independent or predictor variables were set at zero. The finding from this model indicates the presence of statistical significance linear dependency of the means for time, real GDP and average price. Standard error The standard errors are inferential statistics obtained by dividing standard deviation by the square root of the sample population. Therefore, the larger the error, the smaller the sample size, it is an estimate of the association between the sample population and the standard deviation. Real GDP reported the lowest standard error as opposed to the average price that had the highest error (smallest sample size). Trends in the industry sales forecast Merica 1 and Merica 2 During the financial year 5, there was a sustained increase in the industry sales from 527000 units in the first quarter to 595000 in the second quarter for both Merica 1 and Merica 2. The value reduced to 550000 units in the third quarter but later increased to 719000units in the last quarter for both. The following year (Y6) both Merica 1 and Merica 2 recorded a similar trend of increased units of sales from 585000 units in the first quarter to 791000 units in the fourth quarter, however, the third quarter (606000 units) reported a decline in the units from the second quarter (657000 units). The general trend is that the third quarter reported lower value than both the seconds and the fourth quarters, a drop in the sales unit was recorded for both the industry and the company sales forecast units during the third quarter. Merica 2 reported higher estimate than Merica 1 for all the quarters. Merica 3 For Merica 3, in the financial year 5, there was a sustained increase in the industry sales from 515000 units in the first quarter to 581000 during the second quarter. The value reduced to 538000 units in the third quarter but later increased to 709000units in the last quarter. The subsequent year (Y6), recorded a similar trend of increased units of sales from 572000 units in the first quarter to around 777000 units in the fourth quarter, however, third quarter (595000) reported declined units from the second quarter (644000 units). The general trend is that the third quarter reported lower value than both the seconds and the fourth quarters; a drop in the sales unit was recorded for both the industry and the company sales forecast units. Nystok For Nystok, in the financial year 5, it reported the lowest industrial sale forecast. The forecast increase in the industry sales from 294000 units in the first quarter to 331000 units during the second quarter. The value reduced to 305000 units in the third quarter but later increased to 398000units in the last quarter. The subsequent year (Y6), recorded a similar trend of increased units of sales from 323000 units in the first quarter to around 435000 units in the fourth quarter, however, third quarter (334000) reported declined units from the second quarter (363000 units). Trends in the company sales forecast Merica 1 and Merica 2 A similar trend was noted in the company sales forecast. The first quarter of Y5 recorded 103000 and 108000 units that increased to 117000 and 122000 units in the second quarter, but later dropped to 108000 and 113000 units and finally increased to 141000 and 148000 units in the fourth quarter. During the financial year 6, a similar trend was noted. The first quarter recorded 115000 and 120000 units that increased to 129000 and 135000 units in the second quarter, but later dropped to 119000 and 125000 units and finally increased to 155000 and 163000 units in the fourth quarter for Merica 1 and Merica 2 respectively. The general trend is that the third quarter reported lower value than both the seconds and the fourth quarters, a drop in the sales unit was recorded for both the industry and the company sales forecast units during the third quarter. Merica 2 reported higher estimate than Merica 1 for all the quarters. Merica 3 For the company sales forecast, the first quarter of Y5 recorded 57000 units that increased to 65000 units in the second quarter, but later dropped to 60000 units and finally rose to 78000 units in the fourth quarter. For the financial year 6, a similar trend was noted, because the first quarter recorded 64000 units that risen to 72000 units in the second quarter, but later dropped to 66000 units and finally rose to 86000 in the fourth quarter. The general trend is that the third quarter reported lower value than both the seconds and the fourth quarters; a drop in the sales unit was recorded for both the industry and the company sales forecast units. Nystok Summary of trend analysis for the company sales forecast is that the third quarter reported lower value than both the seconds and the fourth quarters, a drop in the sales unit was recorded for both the industry and the company sales forecast units. The trend for the market share The trend for market share for all markets (Merica 1, Merica 2, Merica 3, and Nystok) showed that the third quarter reported the highest parentage in Y5 only. Besides, the first quarter of Y5 reported greater percentage than quarters 2 and 4 for Merica 1 and Merica 2. However, the fourth quarter in Merica 3 and Nystock for Y5 reported the second largest market share. For Y6, the first quarter reported the highest market share of all the four markets. This indicates that an increase in forecast industry and company sales units decrease the market share. Read More