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A B 1 2 3 4 5 6 C D E F G H J K L M N ° P Q R S Car Plus Co. believes local payroll and local sales of import cars for the year can be considerably associated with Car Plus's yearly sales. The management looked into their stored data and summarized what is available in Table 4 below (the 10 years in the table are not consecutive years). Associate method (i.e., linear regression) is the forecasting method the management has decided to use. Answer the questions Q1 and Q2 below. 7 Table 4 Local sales of import 8 cars (in million) Local payroll Car Plus's yearly (in billion) sales (in thousand) 9 Year 1 8.0 2.0 94 10 Year 2 11.0 3.5 135 11 Year 3 12.0 4.0 188 12 Year 4 15.0 4.5 225 13 Year 5 13.4 4.2 175 14 Year 6 17.0 2.7 196 15 Year 7 18.4 3.5 260 16 Year 8 21.6 3.6 318 17 Year 9 20.5 3.2 270 18 Year 10 16.0 2.2 195 19 20 21 22 Table 5 23 Interest rate (%) 24 Year 1 3.0 25 Year 2 4.2 26 Year 3 6.0 27 Year 4 3.0 28 Year 5 5.0 29 Year 6 4.8 30 Year 7 3.0 31 Year 8 6.0 B2 Year 9 4.0 33 Year 10 2.0 34 35 36 87 38 89 40 41 42 13 14 15 46 47 48 19 50 51 52 53 54 55 56 57 58 59 50 51 52 53 54 Q1: Given the estimated local sales of import cars, $18 million, and estimated local payroll, $3.8 billion, next year, what is the forecasted sales for Car Plus for next year? You have to show your anaylsis to earn points. Sales next year (in thousand) Q2: The manager, Alan, suggested the annual average interest rate (Table 5) be taken into consideration along with local payroll and local sales of import cars for the year, when forecasting Car Plus's yearly sales. Along with the information indicated in Q1, Alan predicted the average interest rate next year is 5.6%. Should the interest rate be included to forecast Car Plus's next year's sales? Provide the quantitative/statistical reasoning behind your answer (no personal perception please). Yes or No, and your reasoning

A B 1 2 3 4 5 6 C D E F G H J K L M N ° P Q R S Car Plus Co. believes local payroll and local sales of import cars for the year can be considerably associated with Car Plus's yearly sales. The management looked into their stored data and summarized what is available in Table 4 below (the 10 years in the table are not consecutive years). Associate method (i.e., linear regression) is the forecasting method the management has decided to use. Answer the questions Q1 and Q2 below. 7 Table 4 Local sales of import 8 cars (in million) Local payroll Car Plus's yearly (in billion) sales (in thousand) 9 Year 1 8.0 2.0 94 10 Year 2 11.0 3.5 135 11 Year 3 12.0 4.0 188 12 Year 4 15.0 4.5 225 13 Year 5 13.4 4.2 175 14 Year 6 17.0 2.7 196 15 Year 7 18.4 3.5 260 16 Year 8 21.6 3.6 318 17 Year 9 20.5 3.2 270 18 Year 10 16.0 2.2 195 19 20 21 22 Table 5 23 Interest rate (%) 24 Year 1 3.0 25 Year 2 4.2 26 Year 3 6.0 27 Year 4 3.0 28 Year 5 5.0 29 Year 6 4.8 30 Year 7 3.0 31 Year 8 6.0 B2 Year 9 4.0 33 Year 10 2.0 34 35 36 87 38 89 40 41 42 13 14 15 46 47 48 19 50 51 52 53 54 55 56 57 58 59 50 51 52 53 54 Q1: Given the estimated local sales of import cars, $18 million, and estimated local payroll, $3.8 billion, next year, what is the forecasted sales for Car Plus for next year? You have to show your anaylsis to earn points. Sales next year (in thousand) Q2: The manager, Alan, suggested the annual average interest rate (Table 5) be taken into consideration along with local payroll and local sales of import cars for the year, when forecasting Car Plus's yearly sales. Along with the information indicated in Q1, Alan predicted the average interest rate next year is 5.6%. Should the interest rate be included to forecast Car Plus's next year's sales? Provide the quantitative/statistical reasoning behind your answer (no personal perception please). Yes or No, and your reasoning

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter13: Regression And Forecasting Models
Section13.7: Exponential Smoothing Models
Problem 26P: The file P13_26.xlsx contains the monthly number of airline tickets sold by the CareFree Travel...
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A B 1 2 3 4 5 6 C D E F G H J K L M N ° P Q R S Car Plus Co. believes local payroll and local sales of import cars for the year can be considerably associated with Car Plus's yearly sales. The management looked into their stored data and summarized what is available in Table 4 below (the 10 years in the table are not consecutive years). Associate method (i.e., linear regression) is the forecasting method the management has decided to use. Answer the questions Q1 and Q2 below. 7 Table 4 Local sales of import 8 cars (in million) Local payroll Car Plus's yearly (in billion) sales (in thousand) 9 Year 1 8.0 2.0 94 10 Year 2 11.0 3.5 135 11 Year 3 12.0 4.0 188 12 Year 4 15.0 4.5 225 13 Year 5 13.4 4.2 175 14 Year 6 17.0 2.7 196 15 Year 7 18.4 3.5 260 16 Year 8 21.6 3.6 318 17 Year 9 20.5 3.2 270 18 Year 10 16.0 2.2 195 19 20 21 22 Table 5 23 Interest rate (%) 24 Year 1 3.0 25 Year 2 4.2 26 Year 3 6.0 27 Year 4 3.0 28 Year 5 5.0 29 Year 6 4.8 30 Year 7 3.0 31 Year 8 6.0 B2 Year 9 4.0 33 Year 10 2.0 34 35 36 87 38 89 40 41 42 13 14 15 46 47 48 19 50 51 52 53 54 55 56 57 58 59 50 51 52 53 54 Q1: Given the estimated local sales of import cars, $18 million, and estimated local payroll, $3.8 billion, next year, what is the forecasted sales for Car Plus for next year? You have to show your anaylsis to earn points. Sales next year (in thousand) Q2: The manager, Alan, suggested the annual average interest rate (Table 5) be taken into consideration along with local payroll and local sales of import cars for the year, when forecasting Car Plus's yearly sales. Along with the information indicated in Q1, Alan predicted the average interest rate next year is 5.6%. Should the interest rate be included to forecast Car Plus's next year's sales? Provide the quantitative/statistical reasoning behind your answer (no personal perception please). Yes or No, and your reasoning
Transcribed Image Text:A B 1 2 3 4 5 6 C D E F G H J K L M N ° P Q R S Car Plus Co. believes local payroll and local sales of import cars for the year can be considerably associated with Car Plus's yearly sales. The management looked into their stored data and summarized what is available in Table 4 below (the 10 years in the table are not consecutive years). Associate method (i.e., linear regression) is the forecasting method the management has decided to use. Answer the questions Q1 and Q2 below. 7 Table 4 Local sales of import 8 cars (in million) Local payroll Car Plus's yearly (in billion) sales (in thousand) 9 Year 1 8.0 2.0 94 10 Year 2 11.0 3.5 135 11 Year 3 12.0 4.0 188 12 Year 4 15.0 4.5 225 13 Year 5 13.4 4.2 175 14 Year 6 17.0 2.7 196 15 Year 7 18.4 3.5 260 16 Year 8 21.6 3.6 318 17 Year 9 20.5 3.2 270 18 Year 10 16.0 2.2 195 19 20 21 22 Table 5 23 Interest rate (%) 24 Year 1 3.0 25 Year 2 4.2 26 Year 3 6.0 27 Year 4 3.0 28 Year 5 5.0 29 Year 6 4.8 30 Year 7 3.0 31 Year 8 6.0 B2 Year 9 4.0 33 Year 10 2.0 34 35 36 87 38 89 40 41 42 13 14 15 46 47 48 19 50 51 52 53 54 55 56 57 58 59 50 51 52 53 54 Q1: Given the estimated local sales of import cars, $18 million, and estimated local payroll, $3.8 billion, next year, what is the forecasted sales for Car Plus for next year? You have to show your anaylsis to earn points. Sales next year (in thousand) Q2: The manager, Alan, suggested the annual average interest rate (Table 5) be taken into consideration along with local payroll and local sales of import cars for the year, when forecasting Car Plus's yearly sales. Along with the information indicated in Q1, Alan predicted the average interest rate next year is 5.6%. Should the interest rate be included to forecast Car Plus's next year's sales? Provide the quantitative/statistical reasoning behind your answer (no personal perception please). Yes or No, and your reasoning
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