Introduction

Forecasting method is used in predicting of what will happen or occur in the

future. This method was often used in forecasting the sales of a company, this will

also help to monitor the sales if it will increase or decrease and this can be a way to

make sure that what the company are doing is going to help to increase the sales in

the future. In this case, forecasting method is used specifically the Linear

Regression.

According to Blettner et., al (2010), Regression analysis employs a model that

describes the relationships between the dependent variables and the independent

variables in a simplified mathematical form. Linear regression is an important tool for

statistical analysis. Its broad spectrum of uses includes relationship description,

estimation, and prognostication.

According to Pedhazur (1997), regression analysis has 2 uses in scientific

literature: prediction, including classification, and explanation. Regression analysis is

a technique used in statistics for investigating and modelling the relationship

between variables (Douglas Montgomery, Peck, & Vinning, 2012)

Linear regression is most often thought of as a causal method of forecasting

in which a mathematical relationship is developed between demand and some other

factor that affects demand behaviour. JustmyScents is an online perfume shop and

Kiervy Jane Ernie decided to be a reseller of this online shop, it offers various kinds

of perfume. Kiervy started reselling on this online shop last April, she is now 6

months in the business and the sales are going well. In this case, linear regression is

used to forecast of how will be the sales of JustmyScents for the 7 th month (October).
 Methodology

In this part of the study, the researcher make use of Linear Regression to

determine the 7th month sales of JustmyScents online perfume shop. The methods

and models are created based on the available data, using the sales numbers and

number of months that the shop existed. Listed below are the sales for 6 months

from April to September of Justmyscents by Kiervy.

Months Sales
(1) April 9
(2) May 12
(3) June 16
(4) July 18
(5) August 21
(6) September 24
Table 1.1 List of Months and Sales.

Table 1.1 shows the number of months since JustmyScents started, corresponds to

it are the number of perfume that is being sold.

Formulas:

∑y ∑ xy −n x́ ȳ
ȳ= b= ŷ=a+ bx
n ∑ x 2−n x́ 2

∑x
x́= a= ȳ−b x́
n

Results and Discussion

Table 1.2
 Months (x) Sales (y) xy x2
1 9 9 1
2 12 24 4
3 16 48 9
4 18 72 16
5 21 105 25
6 24 144 36
Total= 21 100 402 91

Table 1.2 shows the product of the dependent variable which is the

months and independent variable which is the sales and when the

dependent variable is raised to two (2).

Computations:

∑x 21
x́= x̅ = =3.5
n 6

∑y 100
ȳ= ȳ= =16.67
n 6

∑ xy −n x́ ȳ
b= a= ȳ −b x́
∑ x 2−n x́ 2
402−6 (3.5 )( 16.67 )
= 91−6 (3.5)2
= 16.67-2.97(3.5)
402−350.07
¿
91−73.5
= 16.67-10.395
 51.93
¿ a=6.275
17.5
b=2.9674∨2.97

Regression Line:

ŷ=a+bx

ŷ=6.275+ 2.97 x

Forecast sale for October 7th month:

x=7

ŷ=6.275+ 2.97 ( 7 )

ŷ=27.065∨27

Conclusion

Based on the computations and result shown in this research, JustmyScents

online perfume shop will have an increase in its sales for their 7 th month. According

to the computed forecasted value of the 7 th month sales of JustmyScents it will have

an increase of about three (3) sales for the month of October.

As what concluded in this study using linear regression the researcher can

recommend that:

 JustmyScents should continue the strategy they are using so they can get

more sales.

 JustmyScents should continue using forecasting method to determine and

monitor the sales for their succeeding months.

Reference

Blettner et., al, (2010). Linear Regression Analysis. Dtsch Arztebl International.

Douglas Montgomery, Peck, E., & Vinning, G. (2012). Introduction to Linear

Regression Analysis (5th ed.). Wiley.

Pedhazur EJ. Multiple Regression in Behavioral Research. 3 rd. ed. Fort Worth, TX:

Harcourt Brace College Publishers; 1997.

Rogationist College
College Department
Lalaan 2nd, Silang, Cavite
 Final output
In
Management Science

Submitted By:
Shane C. Ernie
CT18-0011
BSA 101

Submitted To:
Annaliza C. Sinfuego, MS

October 26, 2018