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Linear trend equation

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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) t2 Y2 tY

1 5.4 1 29.16 5.4

2 6.2 4 38.44 12.4

3 12.7 9 161.29 38.1

4 20.6 16 424.36 82.4

5 28.4 25 806.56 142.0

6 44.9 36 2016.01 269.4

21 118.2 91 3475.82 549.7

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The forecasting of a time series data using a linear trend line is discussed in the solution.

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