Cell phone sales for a California-based firm over the last 10 weeks are shown in the table below. Plot the data, and visually check to see if a linear trend line would be appropriate. Then determine the equation of the trend line, and predict sales for weeks 11 and 12.

Question

Week	Unit Sales
1	700
2	724
3	720
4	728
5	740
6	742
7	758
8	750
9	770
10	775

Accepted Answer

a. A plot suggests that a linear trend line would be appropriate

b. The solution obtained by using the Excel template for linear trend is shown in Table 3.1 .

b = 7.51 and a = 699.40

The trend line is [latex]F_t = 699.40 + 7.51 t[/latex], where [latex]t = 0[/latex] for period 0.

c. Substituting values of t into this equation, the forecasts for the next two periods (i.e., [latex]t= 11[/latex] and [latex]t=12[/latex] ) are:

[latex]F_{11} = 699.40 + 7.51(11) = 782.01[/latex]

[latex]F_{12} = 699.40 + 7.51(12) = 789.52[/latex]

d. For purposes of illustation, the original data , the trend line , and the two projections (forecasts) are shown on the following graph:

Question 3.5: Cell phone sales for a California-based firm over the last 1...

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