The table below shows annual demand (in 100,000 units per year) for Widgets. Use this information to calculate a linear trend forecasting model using regression analysis. Use your trend estimate to forecast demand for the years 1995 and 2000.
Year Demand
1990 1
1991 4
1992 5
1993 8
Being as my profession decides to spring questions on us that he hasn't taught, I'm at a loss on how to approach this problem, let alone solve it.
Any help is greatly appreciated.
The regression equation is Y=-1+2.2t
where Y=the output and t is the time. Hence the demand for1995 is
Y=-1+(2.2).6=-1+13.2=12.2=12(approx.)
the demand in 2000 is
Y=-1+(2.2).11=-1+24.2=-1+24.2=23.2=23 (approx.)
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