Mini Case 2

Eli Orchid has designed a new pharmaceutical product, Orchid Relief, which improves the night sleep. Before initiating mass production of the product, Eli Orchid has been market-testing Orchid Relief in Orange County over the past 8 weeks. The daily demand values are recorded in the Excel file provided. Eli Orchid plans on using the sales data to predict sales for the upcoming week. An accurate forecast would be helpful in making arrangements for the company's production processes and designing promotions.

The COO of the company approved the initial analysis and asked for the following extensions[1]:

1/ To fit a new multiple regression model with dummy variables for weekdays (not the weekend), and to provide the regression equation (d = a*t + b₁x₁ + b₂x₂ + b₃x₃ + b₄x₄ + b₅x₅ + b₆x₆ + c), along with Adjusted R².

d =

Adjusted R²=

2/ To use all three models:

M1: d = 1.0356t + 339.29

M2: d=0.7163t+116.7679w+315.0262

M3: d= 454 -119.2750x

to predict the demand for seven days ahead (Mon, Tue, ..., Sun) and find the total weekly demand.

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