## A-CAT Corp Statistical Analysis Report Case Solution

Therefore, the process which would be employed in this report would be begin first of all by analyzing the change in the average number of the transformers and whether that change is significant or not. Finally, a new forecasting model for predicting the demand of the regulators has been developed. The new forecast model for demand estimation of transformers has been based upon certain factors on which the demand is dependent so that the right quantity is determined for the estimated demand in each period and thus, the issue of under and over-stocking is resolved.

**Analysis of Data**

First of all, if we analyze the **descriptive statistics **from 2007 to 2010 as requested by the Vice President, then it could be seen that the mean demand of the transforms has been increasing significantly. The maximum demand is 1153 units for the year 2010. The volatility of the demand currently is lower as compared to volatility between 2006 and 2008. Now the quality control department needs to use this data for analyzing the performance and setting up control limits for control charts for performance analysis (Chou, 1975).

Furthermore, using the demand data for the year 2010, the **One Sample T-test** has been performed in order to analyze that whether the mean numbers of the transformers have increased significantly or not. If we look at the results of the test in the appendix, then it could be seen that the t- value is less than the critical t –value and the p value is 3.8% which is less than the level of significance of 95%, hence it could be said that the change in the mean number of the transformers is significant and it is likely to be equal to equal to or greater than 1000 units. In addition to this, the **One Way ANOVA** has also been applied to test whether the mean number of the transformers has changed significantly from 2006 to 2010 or not and the p-value of 0.010 of this test as shown in the appendix confirms that the mean number of the transforms has increased from 2006 to 2010 significantly.

Finally, the **forecast model **has been formulated by performing **linear regression** on the basis of historical sales of the refrigerators (Draper, 1998). The correlation between the demand of the voltage regulators and the sales of the refrigerators is high and positive at 93%, which shows that both are directly related to one another (Cohen, 1993). The adjusted r square value of 85% also shows that the percentage change in the demand of the voltage regulators on the basis of the sales of the refrigerators is high and the p-value of ANOVA shows that the overall model is significant and fitted.

**Reliability of Results**

The coefficients table in the output of the linear regression model shows that if the sales of the refrigerator are increased by a single unit, then the demand for the regulators is increased by 0.315. All these results generated in the analysis section as well as the above forecast model are reliable since these are based upon the historical data and the newly estimated demand for the period of 2009-2010. The same trend has been followed by the regulators of the company therefore; the analysis performed is reliable and correct.

**Data driven Decision & Recommendation**

The final decision, which has been derived on the basis of the data provided in the case, is that the operational managers of A-Cat Corporation need to make use of the above forecasting model to estimate the demand of the voltage regulators in future. In the upcoming years, more than 1000 units of the transformers need to be manufactured to meet the demand of the customers in the market and avoid under- stocking and overstocking (Nelder, 1990). Moreover, managers should always follow a rational approach in demand estimation and never just rely on their intuitions. Finally, the operational managers need to determine more variables incorporate them in the above forecasting model so that the demand forecasts in the upcoming years are more appropriate and do not result in lost sales for the A-Cat Corp (Ellis, 2010)…………….

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