Uncertainty, Data, and Judgment
Enrico Diecidue
Group Assignment for “Harmon Foods, Inc.”
A hardcopy of your report is due before the beginning of class in Session 16. Please write
the names of all the group members, and your section number, on the cover page.
Be ready to present your solution in class: bring a copy of any materials you need for
your presentation, either on transparencies, or on a USB key. You should keep your
presentation short, simple and functional.
Your project grade will be based on the printed report only, and distributed together with
the exam grades. Your report should be as short as possible, addressing the points listed
below.
1. Build the regression model, starting with the independent variables in the file
“harmon.xls” (available on the course website, under session 16). Please include
the regression output for your model in your report.
2. Argue that your model is good.
a. How does it compare with other possible models (if you include/remove
some independent variables, etc.)?
b. Check whether the regression assumptions are satisfied (briefly summarize
your conclusions from residual analysis).
3. For the next month, January 1988, the planned amount of Consumer Packs is
100,000 cases and Dealer Allowances are set at $500,000. Use your model to
predict sales in January 1988. Please report a point estimate and a 95% prediction
interval.
4. Give a short interpretation for each of the regression coefficients in your model.
Construct 80% confidence intervals for each coefficient.
5. If some extra budget becomes available, would you allocate it to Consumer Packs
or to Dealer Allowances?