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13th Edition

Anderson

Publisher: CENGAGE L

ISBN: 9781305881884

Chapter 17, Problem 48SE

Textbook Problem

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The Costello Music Company has been in business for five years. During that time, sales of pianos increased from 12 units in the first year to 76 units in the most recent year. Fred Costello, the firm's owner, wants to develop a forecast of piano sales for the coming year. The historical data follow.

Year |
1 | 2 | 3 | 4 | 5 |

Sales |
12 | 28 | 34 | 50 | 76 |

- a. Construct a time series plot. What type of pattern exists in the data?
- b. Develop the linear trend equation for the time series. What is the average increase in sales that the firm has been realizing per year?
- c. Forecast sales for years 6 and 7.

**a.**

To determine

Construct the time series plot.

Explain the type of pattern.

**Calculation:**

It is given that Costello Music Company is in business for five years. In that period, the sales of the piano increased from 12 units in the first year to 76 units in the latest year.

**Software procedure:**

Step-by-step procedure to draw the time series plot using the MINITAB software:

- Choose
**Graph > Time Series Plot**...

**b.**

To determine

Calculate the linear trend equation for data.

Find the average increase in sales per year.

**c.**

To determine

Calculate the forecast sales of years 6 and 7.

STATISTICS F/BUSINESS+ECONOMICS-TEXT

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Ch. 17.2 - Consider the following time series data. Week 1 2...Ch. 17.2 - Refer to the time series data in exercise 1. Using...Ch. 17.2 - Exercises 1 and 2 used different forecasting...Ch. 17.2 - Consider the following time series data. Month 1 2...Ch. 17.3 - Consider the following time series data. Week 1 2...Ch. 17.3 - Consider the following time series data. Month 1 2...Ch. 17.3 - Refer to the gasoline sales time series data in...Ch. 17.3 - Refer again to the gasoline sales time series data...Ch. 17.3 - With the gasoline time series data from Table...Ch. 17.3 - With a smoothing constant of = .2, equation...

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