Suntrek is a global manufacturer and supplier of denim jeans to apparel retailers around the world. It purchases baled cotton around the world, ships it to its denim fabric factories, then to its denim jeans manufacturing facilities. Its cotton purchases and manufacturing and shipping plans depend on an accurate forecast of denim jeans demand. Suntrek believes there might be a strong relationship between cotton production and denim jeans demand, which will enable them to include cotton production as part of its forecasting process. Following are global cotton production and denim jeans sales for the past 6 years.

Year Cotton Production

(millions of bales)

Denim Jeans Sales

(millions of pairs)

1 123 1,830 2 109 2,010 3 118 1,903 4 114 1,875 5 103 2,110 6 109 2,005 Develop a linear regression model for these data, forecast denim jeans demand for cotton production of 15 million bales, and explain why you think the model should or should not be used to forecast denim jeans demand. LO.1