Business Forecasting and Data Analysis Essay Example | Topics and Well Written Essays - 2000 words

Business Forecasting and Data Analysis - Essay Example For the chart above, in order to improve the chart’s usefulness, the firms included in the graph are those with total weekly labor hours below 100,000. The few firms (approximately 10) which had total labor hours at more than 100,000 were not included. The graph shows that there is no systematic change in overall management score based on total labor hours. To determine if variations one variable changes in tandem with another variable, the correlation may be used. In this case, SPSS was used to determine Pearson correlation; a correlation statistic of higher than 0.50 is considered moderately strong, and the closer the coefficient is to 1.0, the stronger the correlation. For all three instances above, correlation coefficients are weak because none of them exceeded 0.50 nor approached the maximum of 1.0. In all cases, however, results are significant at the 0.01 level. This means that while the correlations of all three variables with management score are significant, the variations attributed to them are not very large. In conducting the regression analysis, the intention is to predict the value of a dependent variable if the values of predictor variables are known. The problem given seeks to determine whether or not variations in total sales among firms may be determined based on firm ownership, assets, management score, and weekly labor hours. Because there are four predictor variables, multivariate regression will be used. The assumptions on which the regression is based are that the variables are normally distributed and that there is a linear relationship between the dependent and independent variables. The model summary table below shows that the model has an R-value (representing simple correlation) of 0.914, indicating a high degree of correlation.