Based on annual data from 2000-2010, the Gadget Company estimates that sales are growing according to a linear trend:                      Q = 50,000 + 200t             where t is time and t = 0 in 2000.        a.  Forecast sales for 2013.      b.  Do you see any problems with this forecasting method?

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter5: Business And Economic Forecasting
Section: Chapter Questions
Problem 2.1CE
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Based on annual data from 2000-2010, the Gadget Company estimates that sales are growing according to a linear trend:

 

                   Q = 50,000 + 200t

 

          where t is time and = 0 in 2000.

 

     a.  Forecast sales for 2013.

     b.  Do you see any problems with this forecasting method?

 

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