Question
1. Malcar Autoparts Company has started producing replacement control microcomputers for automobiles. Sales data since 2000 are as follows: Year Sales 1 2000 240,000 2
1. Malcar Autoparts Company has started producing replacement control microcomputers for automobiles. Sales data since 2000 are as follows:
| Year | Sales |
1 | 2000 | 240,000 |
2 | 2001 | 218,000 |
3 | 2002 | 405,000 |
4 | 2003 | 587,000 |
5 | 2004 | 795,000 |
6 | 2005 | 762,000 |
7 | 2006 | 998,000 |
8 | 2007 | 1,217,000 |
9 | 2008 | 1,570.000 |
10 | 2009 | 1,947,000 |
11 | 2010 | 2,711,000 |
12 | 2011 | 3,104,000 |
13 | 2012 | 2,918,000 |
14 | 2013 | 4,606,000 |
15 | 2014 | 5,216,000 |
16 | 2015 | 5,010,000 |
| Total |
|
a) Graph these data and indicate whether they appear to have
a linear trend. Discuss this.
b) Develop a simple linear regression model with time as the independent variable. Using this regression model, describe the trend and the strength of the linear trend over the 16 years. Is the trend line statistically significant? Plot the trend line against the actual data.
c) Compute the MAD for this model.
d) Provide the Malcar Autoparts Company an estimate of its expected sales for the next 5 years.
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