Question

Long a market leader in the production of heavy machinery, the Spellman Corporation recently has been enjoying a steady increase in the sales of its new lathe. The sales over the past 10 months are shown below.
Because of this steady increase, management has decided to use causal forecasting, with the month as the independent variable and sales as the dependent variable, to forecast sales in the coming months.
(a) Plot these data on a two-dimensional graph with the month on the horizontal axis and sales on the vertical axis.
(b) Find the formula for the linear regression line that fits these data.
(c) Plot this line on the graph constructed in part (a).
(d) Use this line to forecast sales in month 11.
(e) Use this line to forecast sales in month 20.
(f) What does the formula for the linear regression line indicate is roughly the average growth in sales per month?


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  • CreatedSeptember 22, 2015
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