Question

The following is the recent historical sales of Sony HDTV at a local BestBuy store. Month...

The following is the recent historical sales of Sony HDTV at a local BestBuy store.

Month Jan Feb Mar April May
Actual HDTV sales 60 65 70 55 62

Use simple linear regression y=a+bx, to first calculate the parameter value of b , then the parameter value of a , and finally to forecast sales for June.

There should be 3 separate answers for each part .

Homework Answers

Answer #1

PERIOD (X)

DEMAND (Y)

X

Y

X * Y

X^2

1

60

1

60

60

1

2

65

2

65

130

4

3

70

3

70

210

9

4

55

4

55

220

16

5

62

5

62

310

25

SIGMA

15

312

930

55


SLOPE = ((N * SIGMA(XY)) - (SIGMA(X) * SIGMA(Y))) - (N * SIGMA(X^2) - SIGMA(X)^2)

SLOPE = ((5 * 930) - (15 * 312) / ((5 * 55) - 15^2) = -0.6

INTERCEPT = (SIGMA(Y) * SIGMA(X^2) - SIGMA(X) * SIGMA(XY)) / (N * SIGMA(X^2) - SIGMA(X)^2)

INTERCEPT = (312 * 55) - (15 * 930) / ((5 * 55) - 15^2) = 64.2

LINE EQUATION = A + B(x), WHERE A IS THE INTERCEPT, B IS THE SLOPE, x IS THE PERIOD = 64.2 + (-0.6 * X)

FOR THE VALUE OF X = 6 FORECAST = 64.2 + (-0.6 * 6) = 60.6

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