From the course: Excel: Sales Forecasting
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Predict values with regression analysis
From the course: Excel: Sales Forecasting
Predict values with regression analysis
- [Instructor] Running a regression is easy enough, but where the complexity comes from, and frankly, the usefulness in regressions comes from, is actually making the prediction, making the forecast. So let's talk about how this process works. So regression analysis essentially is a business tool that in our particular application, we want to use for sales forecasting. The regression in its basic form just says y equals ax plus b. In other words, y the variable that we're trying to forecast is driven by some variable x, let's say marketing spend, and the impact that marketing spend has on our business. In addition, we've got some sort of other factors that are going on, like for instance, the level of sales that we'd have if we had zero marketing spend, and that's our b variable. So we're going to use this basic structure for prediction. Now, how does all this work? Well, basically, we're going to follow five steps. We're…
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