The arithmetic average growth rate in sales is 7%, the geometric average growth rate in sales...
The arithmetic average growth rate in sales is 7%, the geometric average growth rate in sales is 6% and the regression equation to estimate sales is Sales = 50 + 15(T). In 2017 (T=19), sales were 335.
1. What is the forecasted sales for 2018 using the geometric average? (express your answer to 2 decimal places)
2. What is the forecasted sales for 2018 using the arithmetic average? (express your answer to 2 decimal places)
3. What is the forecasted sales for 2018 using the regression equation?
Homework Answers
Sales in 2017 = 335
Arithmetic average growth rate in sales = 7%
Geometric average growth rate in sales = 6%
1.
Forecasted sales for 2018 using geometric average = (1+0.06)*335
Forecasted sales for 2018 using geometric average = 355.1
2.
Forecasted sales for 2018 using arithmetic average = (1+0.07)*335
Forecasted sales for 2018 using arithmetic average = 358.45
3.
Forecasted sales for 2018 using the regression equation
Sales = 50 + 15(T)
For 2017, T = 19
For 2018, T = 20
Sales = 50 + 15*20
Sales = 350
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