Simple Linear Regression Analysis: A Time Series

Specific Motors Limited produces electronic motors for power$-$actuated valves for the construction industry. Specific's production plant has operated at near capacity tor over a year now. Jim White, the plant manager, thinks that the growth in sales will continue, and he wants to develop a long range forecast to a used to plan facility requirements for the next $3$ years. Sales records for the pas $10$ years have been accumulated:

$\backslash$table$[[$Year$,\backslash$table$[[$Annual Sales$],[($Thousands of Units$)]],$Year,$\backslash$table$[[$Annual Sales$],[($Thousands of Units$)]]],[1,1000,6,2,000],[2,1,300,7,2,200],[3,1,800,8,2,600],[4,2,000,9,2,900],[5,2,000,10,3,200]]$

Questions

$($a$)$ Develop a regression equation for predicting the level of demand from electronic motors.

$($b$)$ Use the regression equation to predict the level of demand for the next three years

$($C$)$Determine how closely demand is related to the time period.