Case Study – Business – Exponential Smoothing / Linear Regression

Individual Project Instructions

Study the case Case Study for Individual Project 2019.docx and download the data files Cutting Edge Student File No. 1, V2.xlsx and Cutting Edge Student File No. 2, V2.xlsx. Follow the instructions in the Individual Project Instructions V2.docx to analyze and report on the case. The two models for part 3 are below and note the data in the template models are bogus and must be replace with the data from Cutting Edge Student File No. 2 V2 from above:
Exponential_Smoothing (without seasonality).xlsx
Linear_Regression Model.xlsx
Prepare a business memo to report and discuss your findings on this case and answer the case questions. Follow APA 6 style to prepare the report and include Individual Project Grading Rubric 2019.docx at the beginning of the report. You will also need to submit your Excel spreadsheet file showing calculations that support your report conclusions.

Instructions
In order to complete the assignment, first read the case write-up for the “Cutting Edge” case. Then, answer the questions listed below for each part of the case. The Part 1 questions refer to the 2 years leading up to the opening of the new call center. Part 2 questions refer to the first 13 weeks of operation after opening the call center. Part 3 questions refer to the first 18 months of operating the call center.

Conduct necessary calculations and visualizations to answer the questions. Submit your Excel spreadsheet(s) with calculations/ visualizations to the assignment dropbox before the posted deadline. You may submit additional Excel spreadsheets if you feel they are necessary to support your answers.

Prepare a report, which includes your answers to the assignment questions. Your answers must be entered directly into this Word document below each question. Insert each answer below each question on this document and use as much space as needed.

Grading
A total of 100 percentage points is possible for this assignment. This includes the point values which are assigned to each question (point values are noted next to each question below) plus 10 points which are earned based on following the prescribed assignment format, and the proper writing style and APA format. The percentage points earned on this assignment will be multiplied by 20 to obtain the final assignment grade.

Part 1 (15 points):
Question 1a (5 points): Define a problem statement which reflects the challenge facing Mark as he planned for the opening of the new center.
Question 1b (5 points): Why was Mark’s initial forecast of call volume so far off? What could have been the reasons for this?
Question 1c (5 points): What could Mark have done differently to improve his initial forecast?

Part 2 (25 points):
In answering the Part 2 questions, you should download and refer to Student Data File No. 1 which contains the historical data that was used in preparing the forecast results that are reported in Part 2 of the case write-up document. Note that you do not have to prepare any forecasts in answering this question. Hint: it will be helpful for you to review a time-series plot of the 13 weeks of data contained on Student Data File No. 1.
Question 2a (4 points): Describe the details of the Last Value method used by Harry and explain its accuracy (MAD value) in comparison with the accuracy of the other methods.

Question 2b (4 points): Describe the details of the Averaging method used by Harry and explain its accuracy (MAD value) in comparison with the accuracy of the other methods.
Question 2c (4points): Describe the details of the Moving Average (5 days) method used by Harry and explain its accuracy (MAD value) in comparison with the accuracy of the other methods.
Question 2d (4points): Describe the details of the Exponential Smoothing (alpha = 0.1) method used by Harry and explain its accuracy (MAD value) in comparison with the accuracy of the other methods.
Question 2e (4 points): Describe the details of the Exponential Smoothing (alpha = 0.7) method used by Harry and explain its accuracy (MAD value) in comparison with the accuracy of the other methods.
Question 2f (5 points): Based on the analysis above, provide your recommendations to Mark on daily call volume forecasting to improve the scheduling of the call enter staff. You must recommend a forecasting model as a part of your answer.

Part 3 (50 points):
In answering the Part 3 questions, you should download and refer to Cutting Edge Student Data File No. 2 which contains the historical data and forecasting model templates that you will need to answer the questions.

Question 3a (10 points):
Prepare a forecast of call volume for July 2015 by applying Exponential Smoothing (with alpha = 0.5) to the prior 18 months of data. Use the appropriate Excel template (Exponential_Smoothing (without seasonality.xlsx)to prepare your forecast and assume that initial call volume is 24,000. Show your forecast below and attach the completed Excel template.
Call Volume Forecast for July 2015 (Exponential Smoothing, alpha=0.5): _________________

Question 3b (10 points):
Apply Linear Regression to predict call volume from head count using the appropriate Excel template(Linerar_Regression Model.xlsx). Based on the upcoming acquisition of Cutter Corp on 7/1/2015, the forecast of head count for July 2015 is 77,000 (Estimator x value). Show your forecast below and attach the completed Excel template.
Call Volume Forecast for July 2015 (Causal Forecasting based on head count): _________________

Question 3c (10 points):
Calculate the Mean absolute deviation value of the Exponential Smoothing model (Question 3a) and the Average Estimation Error of the Linear Regression model (Question 3b). You will need to employ the Excel AVERAGE function for the Linear Regression Average Estimation Error (Cell: F36).Explain the difference between the MAD and Agv Est Error values.
Mean absolute deviation of Exponential Smoothing model, alpha=0.5: ______________________
Average Estimation Error for Causal Forecasting model based on headcount: __________________
Explanation of the difference in values:

Question 3d (20 points):
Considering your answers to Questions 3a, 3b and 3c and all the factors that have been described above, prepare your best forecast for July 2015. Show your forecast value below and explain and justify how you came up with this forecast. Finally, provide your recommendations to Mark on how to modify forecasting process and improve its accuracy.
Call Volume Forecast for July 2015 (My forecast): _________________
Explanation and Justification of Your Method:
Your Recommendations: