Suppose a firm has had the historical sales figures shown as follows. What would be the forecast for next year’s sales using regression to estimate a trend?

Suppose a firm has had the historical sales figures shown as follows. What would be the forecast for next year’s sales using regression to estimate a trend?

Year 2013 2014 2015 2016 2017
Sales $ 12,000,000 $ 11,800,000 $ 12,200,000 $ 12,400,000 $ 12,300,000

Use Regression (in Microsoft Excel, choose “Data” tab, “Data Analysis” selection, “Regression” selection), and designate the Sales values as the “Input Y Range,” Year values as the “Input X Range,” and specify an output range. You should get an Intercept of −229,060,000 and an X Variable coefficient of 120,000. Using these values, the forecast value for 2018 will be y = a + (b × x) = −229,060,000 + (120,000 × 2018) = 13,100,000.


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