Forecasting assignment analysis paper
- 1. Dhruv Patel RMIN 5950 810667500 Professor Hoyt Analysis of Forecasting Assignment ABC Company After successfullyanalyzing and decipheringthe data for the Forecastingassignment I will now construct asummarizationof my analysis outlines to be utilized for this particular assignment. I startedwith engineeringan “estimationmodel” for the incident rate, and forecastingthat rate for the year of 2016 approximatelysevenyears after 2009 usingthe data pre filledwithin the Excel document. The incident rate is the entities “Number of employees divided by the “Ultimate WC Frequency”. Whichgave me each specific incident rate for each “year”, or “period” entities. To find the Natural Log of the incident rate I simply included “=LN (IncidentRate)”for eachspecific period/year. Whenconstructinggraphs for the Incident Rate Average and Average Severityfor each period/year Idirected myself to develop a “Line Plot”for the averages for bothof those particular entities. The structures of the graphs are as followed: Incident Rate Frequency Average is slightlyinclinedspiraling downwards indicating frequencyin a decreasingstate as the year’s progress and for the Average Severityentity it is steepingupwards indicating more severe losses foreach particular Incident loss. To better analyze this particular data set I useda toolset fordata analysis known as “RegressionAnalysis”. With this toolset Iwas able to extract the Coefficients knownas the Intercept and Period, and with using those two numbers I ultimatelyended up finding the Incident Rate for 2016 (Intercept – (Period)*(8)). When doing the same exact thing for SeverityAverage and to calculate the Total Losses I
- 2. undertooka different route. Ihad to transform the data to find the average severityfor 2016 and then also use that transformeddata’s answer of Average Severityto input a Total Losses formulaas outlinedby the PowerPoint slides. The equations are as followedfor this particular concept: Average Severity = EXP(Intercept) + EXP(Period)*(8)for 2016, where “EXP” stands for Exponential as I had transform the Natural Log into a whole number again, and Total Losses = Average Severity*Incident Rate* Exposure. The “Exposure” element is the number given as 30,500 for employee count as of fiscal year 2016. After working out the equations I ended up finding the final Total Losses as $7,373,707when employment is 30,500 for fiscal year 2016. Overall an interestingassignment outliningWorker Compensationand its relationshipwithemployee injury/incident losses inproportionto employment statistics andaccidents countedyearlyin periodic forms for fiscal purposes. The Final number for Ultimate WC Losses is $7,283,982.36 afteraExponential functionwas performedto transform the number back into its original state.