Question
Tigers Ltd. sells tiger related paraphernalia and has been in operation since 2012. The company is trying to estimate its future sales. Its past sales
Tigers Ltd. sells tiger related paraphernalia and has been in operation since 2012. The company is trying to estimate its future sales. Its past sales were as follows: (All values in R millions) 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 5 7 9 10 11 15 21 22 21 21 The company hired a business consultant who performed a regression analysis to estimate its future sales which yielded the following equation: Y = 2.1x + 2.5 (R^2 = 0.93) The consultant indicated that replacing 11 into the equation should yield the next years sales estimate, 12 for the year thereafter and so on. The estimate for 2022 is R25.6 million. Upon doing so, one of the larger store managers indicated that they feel that it is overoptimistic as his store sales has been flat over the past four years. Required: Briefly (no more than a paragraph) argue who is correct in this case (support your argument with facts from the question and theory).
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started