Economics-Forecasting
- Consider the sales pattern shown in the data set below:
| Sales | Year | Time Index |
| 121 | 2004 | 0 |
| 130 | 2005 | 1 |
| 145 | 2006 | 2 |
| 160 | 2007 | 3 |
| 155 | 2008 | 4 |
| 179 | 2009 | 5 |
| 215 | 2010 | 6 |
| 208 | 2011 | 7 |
| 235 | 2012 | 8 |
| 262 | 2013 | 9 |
| ? | 2014 | 10 |
| ? | 2015 | 11 |
Using the regression feature of Excel, compute the equation of a trend line to forecast sales in 2014 and 2015. Note, you can use ‘Year’ as the explanatory variable or the ‘Time Index’ as the explanatory variable, but not both in the same equation. In your opinion, is this a good equation for forecasting future sales? Why or why not?
