Monthly U$.$S$.$ Console Hardware Sales $-$ January $2002$ to December $2005$ Regression analysis

Microsoft Xbox$-$Monthly sales $2002$

The figure shows sales figures in the first full sales year for the videogame

console "Microsoft "Xbox", introduced on the US market in $2001.$ As indicated

by the figure, the sales showed an increasing tendency during the year $2002.$

a$)$ Create a simple linear regression model, calculate parameters a and $b$ and

show the formula to be used for predicting "future" sales values. $($Data for

this case is available in Excel$-$format in Canvas. Only the data shown in the

figure, i$.$e$.$ from $2002,$ should be used for creating the model$).$

b$)$ Use the model to estimate the sales for the period $2003-2005.$ Compare

your predictions with the actual sales data, and use the measure Mean

Absolute Deviation $($MAD$)$ to show the forecast errors.

c$)$ What is the reason for the large deviation between predicted and actual

sales? Do you have any suggestions for improving the model?