After graduation, you take a position at Top-Slice, a well-known manufacturer of golf balls. One of your duties is to forecast monthly demand for golf balls. Using the following data, you developed a regression model that expresses monthly sales as a function of average temperature for the month:
Monthly sales = -767.7 + 98.5(average temperature)
a. Using Equations (9.8) and (9.9) from the text, show how the an and bn values of -767.7 and 98.5 were calculated.
b. Use the regression forecasting model to forecast total golf ball sales for June and July 2011. Average temperatures are expected to be 76 degrees in June and 82 degrees in July.
c. Is this regression model a time series or a causal forecasting model? Explain.

Transcribed Image Text:

MONTHLY SALES TEMPERATURE March 2010 4,670 5,310 52 April May June 58 6,320 7,080 69 75 July August September October 7,210 7,040 6,590 5,520 4,640 4,000 2,840 3,170 83 82 78 65 November 54 December 48 January 2011 February 41 42