National Scan, Inc., sells ratio frequency inventory tags. Monthly sales for a 6
ID: 396956 • Letter: N
Question
National Scan, Inc., sells ratio frequency inventory tags. Monthly sales for a 6-month period were as follows Month: Sales Feb 39 43 47 Mar Apr May Jun 63 Jul Disrcgard the demand pattern of the given timc scrics, You are askcd to usc the time scrics to derive a trend cquation. In ordcr to derive the trend cquation is Ft-a+bt, you have to computc several componcnts to computc the valucs for the variables a and b. Answcr the following questions pertaining to information that are relevant to deriving the trend equation a) The 2ty- b) The Ey- c) The value for the b (slope of the trend line)- d) The value for the a (intercept of the trend line) (in 3 decimal places) (in 3 decimal places)Explanation / Answer
Let us number the months as per following :
Feb
1
Mar
2
April
3
May
4
June
5
July
6
Please refer below table for ready reference:
Sales ( y)
t.y
1
39
39
2
43
86
3
47
141
4
51
204
5
63
315
6
61
366
Total =
304
1151
Answer to question a : 304
Answer to question b : 1151
Let the time series equation be :
Y = a + b.t
We place all the values of t and corresponding sales ( y0 as provided in two adjacent columns in excel and apply the formula LINEST ( ) to obtain values of a and b.
Accordingly values of a and b as follows :
A =33.267
B = 4.971
c)The value for the B = 4.971
d)The value for the A = 33.267
Feb
1
Mar
2
April
3
May
4
June
5
July
6
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