Question

Quarterly sales for swarthmore cycles are follows:
Period        sales
1997-I         100
1997-II        110
1997-III       115
1997-IV       125
1998-I         130
1998-II        135
1998-III       145
1998-IV       150

a) Plot the sales data and graphically fit a straight line to the points.
b) In using the data for trend prediction, would the constant rate of change or the constant percentage change model be more appropriate. Explain
c) Using the data to estimate the co-efficient of the equation St = So(1+g)².

Answer 1

a) Plot of sales data and graphically fit of straight line to the point (using MS-Excel) given below

b) From the above two diagrams it is clear that the sale growth follow a straight line not any curve path. ans also R²= 0.992 says that 99.2% data support the linear trend. So, using the data for trend prediction, would the constant rate of change model be more appropriate.

c) Please specify what is in the equation St = So(1+g)². ..