APO-DP Forecasting with MLR
How/where to define coefficient for dependent variable
in MLR forecast profile?
Coefficient for dependent variable?
Consider this:
Y = ax1 + bx2 + cx3 + ... (x1,x2 are the independent
variables and Y is the dependant variable.
a,b,c being the coefficients of the independent variables)
This being the standard equation, I dont see what exactly
u mean by the coefiicient of dependant variable.
I have worked on MLR and it follows this equation.
Following is the scenario :
1. Dependent variable Y is forecast key figure ( 9ADFCST)
2. History for Dependent Variable / Key figure Y is 0QUANTITY
3. Dependent Variable X is a key figures 9AADDKF1 and
9AADDKF2
These above parameters can be defined in MLR profile.
So the formula will be
9ADFCST = ( a * 9AADDKF1) + ( b * 9AADDKF2)
Y = ( a *
X1 ) + ( b * X2 )
Where we have to define the coefficients a and b.
You don't define the coefficients a and b (and the constant
c and other coeffs if you have more independent variables). These
are computed by the MLR engine when you run MLR. Their values can
be displayed by toggling "Para" from the MLR view after running MLR.
If you experiment by changing the historical values of the independent
variables and re-running MLR, you
will see that these coefficients will change (i.e., they
are not pre-defined but rather computed based on the input data).
Note that MLR is not recommended unless you have an expert
user who can interpret what's going on (R**2, Durbin test results, etc.).
Which presents a catch-22 because if you have such users, they would probably
prefer using
other dedicated MLR tools with richer functionality (and
ask you to integrate these to APO!).
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