The Carpet City Store in Carpenteria has kept records of its sales (in square yards) each year, along with the number of permits for new houses in its area.

Carpet City's operations manager believes forecasting sales is possible if housing starts are known for that year. First, the data are plotted in Exhibit 13.21, with x= Number of housing start permits y = Sales of carpeting Because the points appear to be in a straight line, the manager decides to use the linear relationship Y=a+bx. We solve this problem by hand fitting a line. We could also solve for this equation using least squares regression as we did earlier.

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NUMBER OF HOUSING STARTS SALES YEAR PERMITS (IN SQ. YDS.) 1997 18 13,000 1998 15 12,000 1999 12 11,000 2000 10 10,000 2001 20 14,000 2002 28 16,000 2003 35 19,000 2004 30 17,000 2005 20 13,000