DMDRegressionModelCase.docVIP

Data, Model Decision Making  Contents Predicting heating oil consumption at OILPLUS 3 Task i 5 Condition Analysis 5 Consumption prediction 6 Task ii 6 Question answering 6 Task iii 7 Question answering 7 Task iv 7 Condition Analysis 7 Question answering 9 Executive compensation 12 Task i 13 Condition Analysis 13 Question answering 13 Task ii 14 Question answering 14 Task iii 16 Question answering 16 Task iv 17 Question answering 17 Task v 19 Question answering 19 Predicting heating oil consumption at OILPLUS Background OILPLUS, inc. provides heating oil to residential customers in Lancaster, Pennsylvania. OILPLUS would like to predict heating oil consumption among its customers in order to plan its own fuel purchases and to budget its revenue flows appropriately. Consumption of heating oil and average monthly temperature for 55 consecutive months listed as follow: See more detail in “Predicting heating oil consumption at OILPLUS.xlsx” Scatter-plot of average monthly temperature and consumption of heating oil for 55 consecutive months showed as follow: See more detail in “Predicting heating oil consumption at OILPLUS.xlsx” The heating oil consumption and average temperature on each December from year 1989 to 1993 listed as follow: See more detail in “Predicting heating oil consumption at OILPLUS.xlsx” Task i OILPLUS would like to predict the heating oil consumption for next December. The average December monthly temperature over the years 1989-1993 is 35.2 degrees. Use the regression model to predict the heating oil consumption for next December based on this average temperature. Condition Analysis Key ingredients of the regression output for the prediction of heating oil consumption at OILPLUS listed as follow: See more detail in “Predicting heating oil consumption at OILPLUS.xlsx” Scatter-plot of regression residuals for the regression model showed as follow: