Predictive Sales Report
A retail store has recently hired you as a consultant to advise on economic conditions. One important indicator that the retail store is concerned about is the unemployment rate. The retail store has found that an increase in the unemployment rate will cause a lack of consumer spending in their stores. Retail stores use the unemployment rate to estimate how much inventory to keep at their stores, which is important in maintaining cost effectiveness. In this consultant role you will apply calculations and research to create a predictive sales report.
You will complete this project in two parts, but will submit your work as one Word document. Copy and paste your calculations from your Excel workbook into the Word document.
TIP: For help copying and pasting information from Excel to Word go to http://office.microsoft.com/en-us/word-help/copy-excel-data-or-charts-to-word-HP010198874.aspx or watch the “Excel Tips – Tip#48: Copy from Excel to Word” found in Week One Recommended Resources.
The Final Project must be eight to ten pages in length, excluding title page and reference page(s) and must include at least three scholarly sources, in addition to the Job and Labor Statistics site. Be sure to format your work in accordance with APA guidelines as outlined in the Ashford Writing Center.
Reference the data in this Excel Workbook to complete the following quantitative components of the predictive sales report. You will complete the calculations below in your own Excel workbook and then copy and paste from your Excel workbook into the Word document.
- Calculate the mean yearly value using the average unemployment rate by month found in the “Final Project Data Set.”
- Using the years as your x-axis and the annual mean as your y-axis, create a scatter plot and a linear regression line.
- Answer the following questions using your scatter plot and linear regression line:
- Compute the slope of the linear regression line.
- Identify the Y-intercept of the linear regression line.
- Identify the equation of the linear regression line in slope-intercept form.
- Calculate the unemployment rate in 2016, based on the linear regression line.
- Calculate the residuals of each year.
Find the latest unemployment rate in your state. You will need to go to the Bureau of Labor Statistics Website (www.bls.gov)and hover over “Subject Areas” in the top menu panel then select “State and Local Unemployment Rates” from the drop down menu under “Unemployment Rate”. Determine whether the rate in your state is within the range of the linear regression line or if it is an outlier.
- Interpret your results of the model and explain how a company could use the results to drive decision making.
Next interpret the analysis from Part I to complete the following qualitative components of the predictive sales report:
- Introduce the project and its significance to the retail store.
- Reference the statistical analysis that you completed in Part I and explain where the data came from, what type of analysis was done, what the findings were, and whether or not you believe the data to be accurate.
- Explain your data-driven conclusions regarding the effects of the changing unemployment rate on the retail store.
- Predict what could occur in the future that would change your linear regression line and therefore your prediction of sales.