Indusmomentus is a India-based distributor of Korean appliances. The sales volum

Question

Indusmomentus is a India-based distributor of Korean appliances. The sales volume of portable TV sets during the last 12 weeks in Kuala Lumpur is shown in the table below. The demand pattern shows that the trend is constant therefore company wants to implement linear regression method to estimate next month’s sales by using the following regression output T

ime period quantity time period quantity

1 1180 7 1162

2 1176 8 1163

3 1185 9 1180

4 1163 10 1170

5 1188 11 1161

6 1172 12 1177

The demand pattern shows that the trend is constant therefore the company wants you to implement linear regression method to estimate next months (period 13) sales by using the following regression output:

Regression statistics

Multiple R 0.667087934

R square 0.534753551

Adjusted r square 0.048228906

Standard error 9.146700018

Observations 12

ANOVA

                 Df ss               ms             f                 significance f

Regression 1 130.2954545 130.2954545 1.5574008 0.240476358

Residual    10 836.6212121 83.66212121

Total          11 966.9166667

              Coefficients standard error tstat              p-value         lower 95%        Upper 95%

Intercept 1179.28      5.629404714    209.4871374 1.51034E-19 1166.744783     1191.831

Time period -0.954    0.764885481   1.247958653 0.240476358 -2.658816504    0.749726

Explanation / Answer

Here, the linear regression model would be calculated based on the below formula: -

y=1179.28-0.954*Time Period

y=1179.28-0.954*13

y=1166.878

Hence, the sales of portable TV sets in week 13 would be 1167.

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