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Dear sir,
I am having some difficulties to tackle with the following problem.Over an 18 month period, sales have been found to have an underlying linear trend of y=7.112+3.949x, where y is the number of items sold and x represents the month. Monthly deviations from trend have been calculated and month 19 is expected to be 1.12 times the trend value.
What is the forecast number of items to be sold in month 19?
A. 91
B. 92
C. 93
D. 94The answer in the revision kit is B but I don’t understand how the answer is being obtained. Can you please help?
The trend figure for month 19 is:
7.112 + (3.949 x 19) = 82.143
Using the seasonal variation of 1.12, the forecast figure will be 1.12 x 82.143 = 92.
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