As a start in analyzing these data,
a. Graph these data and indicate whether they appear to have a linear trend.
b. Develop a simple linear regression model with time as the independent variable. Using this regression model, describe the trend and the strength of the linear trend over the 16 years. Is the trend line statistically significant? Plot the trend line against the actual data.
c. Compute the MAD value for this model.
d. Provide the Malcar Autoparts Company an estimate of its expected sales for the next 5 years.
e. Provide the maximum and minimum sales Malcar can expect with 90% confidence for the year 2014.
Refer to Malcar Autoparts Company, which has started producing replacement control micro-computers for automobiles. This has been a growth industry since the first control units were introduced in 1985. Sales data since 1994 are as follows:
Year Sales($)
1994…………………240,000
1995…………………218,000
1996…………………405,000
1997…………………587,000
1998…………………795,000
1999…………………762,000
2000…………………998,000
2001……………….1,217,000
2002……………….1,570,000
2003……………….1,947,000
2004……………….2,711,000
2005……………….3,104,000
2006……………….2,918,000
2007……………….4,606,000
2008……………….5,216,000
2009……………….5,010,000