Question: A linear trend forecast is shown below (round b & a to two decimals): t Y t*Y t 2 1 19 19 1 2 18

A linear trend forecast is shown below (round b & a to two decimals):

t

Y

t*Y

t2

1

19

19

1

2

18

36

4

3

15

45

9

4

20

80

16

5

18

90

25

6

22

132

36

7

20

140

49

28

132

542

140

For Sept., t = 8, and Yt = 16.86 + 0.50(8) = 20.86 = 20,860

c. The linear trend approach seems to be the least appropriate because the data appear to vary around an average of about 19 [18.86] and because the slope is close to zero (0.50).

d. Sales are reflective of demand (i.e., no stockouts or backorders occurred).

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