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Sales forecasting model

SBI, Inc. has estimated the following regression model of sales using 250 weekly sales figures representing the firm's sales history over the past 5 years:
lnSt = 6.561 + 0.06t, R2 = 0.99
(0.03) (0.02)

Where St is unit sales in time period (week) t and the numbers in parenthesis are the standard deviations of the two regression coefficients.

a. Express this sales forecasting model in the form of the constant rate of change growth model with continuous compounding:
St = S0egt <i>(Please see attachment for proper equation)</i>
i.e. determine the values for S0 and g in this case.

b. Forecast the value of t at which sales will equal 4,000 units.

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a. Express this sales forecasting model in the form of the constant rate of change growth model with continuous compounding:
St = S0egt
i.e. determine the values for S0 and ...

Solution Summary

Express a sales forecasting model in the form of the constant rate of change growth model with continuous compounding.

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