Submitted by: Submitted by ricardosandoval
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Words: 1191
Pages: 5
Category: Business and Industry
Date Submitted: 10/10/2016 09:07 PM
Forecast of Sales for BAX
By
Ricardo Sandoval
February 12, 2016
Finance 4315
Executive Summary: Three forecasting regression models are created using sales information from Baxter International Inc. from 1991 to 2015. The regression models consist of a 1) Linear Regression Model, 2) Change of Intercept Regression Model, and 3) Change of Slope Regression Model. The Change of Intercept is the regression model with the lowest standard error with a standard error of 1167, while the Linear Model has a standard error of 1748 and the Change of Slope has a 1708. Also, the Change of Intercept Regression Model has a higher R-Squared compared to the other models. The Change of Intercept has 81% R- Squared, while the Linear Model and the Change of Slope Model have 55% and 73% respectively.
1.0 Introduction:
The forecast of sales in a company can help determine financing requirements, labor requirements, and supply requirements for the upcoming years. Using the last twenty five years of sales data from the Wharton Research Data Services website, three forecasts are created and evaluated to create a final forecast model. The models are created using sales data, a change of intercept, and a change of slope to create a better structured error forecast model. We use Excel to create a linear regression error plot and a sales forecast for each forecast model.
2.0 Data and Sample:
2.1 Data
A linear regression error plot and a sales forecast of each forecasting model are created using the yearly sales data from 1991 to 2015. Each forecasting model is compared to the trend shown by the historical sales data of the company and evaluated to create a reasonably accurate forecasting model.
2.2 BAX Baxter International
Baxter International Inc. is a health care company that primarily focuses on products to treat hemophilia, kidney disease, immune disorders and other chronic and acute medical conditions. Baxter’s two major businesses are Bio-Science and Medical...