Question
The following are our company's annual sales ($ million) data from 2015 to 2021.Use the trend equation to forecast sales for 2025. Year 2015 2016
The following are our company's annual sales ($ million) data from 2015 to 2021.Use the trend equation to forecast sales for 2025.
Year | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 |
Sales $000,000 | 16 | 17 | 25 | 28 | 32 | 43 | 50 |
I saw one equation as follows: y = 2.3x - 6.1 is the trend equation for the given data. y=25.4 for x=10. A trend equation was discovered to be $y = (1.8)x + 13.9$ for the provided data. They can forecast revenues of $y = (1.8)(2025) + 13.9 = 100.1 million dollars in 2025 using this formula.
While another used: Utilizing the trend equation y = 5.75x + 7.1429
From y = mx + b
Where y = the Forecast sales for 2025
And x = time period
So Forecast = 5.75*Time Period + 7.1429
y = 5.75(2025) + 7.1429
y = 11491.0714 + 7.1429
y = 11498.21
1) how do you find the trend equation? where did the 5.75x and 7.1429 come from? What about 2.3x and 6.1? Which trend equation is correct?
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