Paul Jordan has just been hired as a management analyst at Digital Cell Phone, Inc. Digital Cell manufacturers a broad line of phones for the consumer market. Paul’s boss, John Smithers, chief operations officers, has asked Paul to stop by his office this morning. After a brief exchange of pleasantries over a cup of coffee, he says he has a special assignment for Paul: “We’ve always just made an educated guess about how many phones we need to make each month. Usually, we just look at how many we sold last month and plan to produce about the same number. This sometimes works fine. But most months we either have too many phones in inventory or we are out of stock. Neither situation is good?”
1.Prepare Paul Jordan’s report to John Smithers using regression analysis. Provide a summary of the cell phone industry outlook as part of Paul’s response.
2. Adding seasonality into your model, how does the analysis change?