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Predicting sales using linear regression line estimation

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ACT Networks, Inc. develops, markets, manufactures, and sells integrated wide-area network access products. The following are annual sales data (in millions of dollars) from 2002 to 2007. Based on this data develop a linear trend equation for this time series. What is the firm's average increase in sales per year? Provide a forecast for sales for 2008.

Year Sales
(t) (Y)
1 5.4
2 6.2
3 12.7
4 20.6
5 28.4
6 44.9

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Solution Summary

Solution describes the steps in findind linear trend line using least square method. It also how linear estimated line can be used to forcast sales.

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Solution

Year Sales
X (Y) X^2 Y^2 XY
1 5.4 1 29.16 5.4
2 6.2 4 38.44 12.4
3 ...

Solution provided by:
Lokesh Jain, MSc
Education
  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
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