1. (8 points) Consider the following trading card demand Month January February

Question

1. (8 points) Consider the following trading card demand Month January February March April May June July August Septembeir Demand 34,000 28,000 26,000 30,000 54,000 93,000 106,000 113.000 99,000 What is the linear regression equation using the above data? (Use 3 decimals for the slope and intercept.) Using your linear regression equation from (a), prepare the forecast for October, November, and December a. b. If you use an Excel spreadsheet, print out the sheet of results as well as a sheet containing the formulas that you used ( can be used to toggle between displaying values and displaying formulas, or you can click Formulas -> Formula Auditing -> Show Formulas).

Explanation / Answer

(a) Calculation of Linear Equation :-

Regression Equation of Y on X :-

Y = a + bX

For calculating the values of a and b:-

a = ?Y/ n = 583000/ 9 = 64777.778

b = ?XY/ ?X2 = 738000/ 60 = 12300

Hence, the regression equation comes to :-

Y = 64777.778 + 12300X

(b) With the help of the above equation, we can forecast the demand for October, November and December as follows :-

YOct = 64777.778 + 12300(5) = 126277.778

YNov = 64777.778 + 12300(6) = 138577.778

YDec = 64777.778 + 12300(7) = 150877.778

Month Deviation (X) Demand (Y) X2 XY January -4 34000 16 -136000 February -3 28000 9 -84000 March -2 26000 4 -52000 April -1 30000 1 -30000 May 0 54000 0 0 June 1 93000 1 93000 July 2 106000 4 212000 August 3 113000 9 339000 September 4 99000 16 396000 n = 9 ?X = 0 ?Y = 583000 ?X2 = 60 ?XY = 738000

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.