What is the linear trend forecast for September?MonthMonthSalesFeb119Mar218Apr315May420Jun518Jul622Aug720

Answered: What is the linear trend forecast for…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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What is the linear trend forecast for September?

Month	Month	Sales
Feb	1	19
Mar	2	18
Apr	3	15
May	4	20
Jun	5	18
Jul	6	22
Aug	7	20

Expert Solution

Step 1

Linear trend equation is the simplest form of regression analysis. It is used to predict the next value in a time series based on the preceding values.

In order to use a linear trend equation, we need to have a set of data that follows a linear pattern. The data has to be ordered by time and there should not be any gaps in between.

The formula for the linear trend equation is:

y = b0 + b1*x

where: y is the next value in the series, x is the current value, and b0 and b1 is intercepts and slope respectively that are determined by analyzing the data.

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