A manufacturer is developing a facility plan to provide production capacity for its factory. The amount of capacity required in the future depends on the number of products demanded by its customers. The data below reflect past sales of its products:YearAnnual Sales (number of products)YearAnnual Sales (number of products)14905461248764753492747244788458Use simple linear regression to forecast annual demand for the products for each of the next three (3) years, by using the tabular method to:derive the values for the intercept and slopederive the linear equationplot the linear regression linedevelop a forecast for the firm’s annual sales for each of the next three years

Simple linear regression is a regression model that gauges the connection between one free factor…

Answered: A manufacturer is developing a facility…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A manufacturer is developing a facility plan to provide production capacity for its factory. The amount of capacity required in the future depends on the number of products demanded by its customers. The data below reflect past sales of its products:

Year	Annual Sales (number of products)	Year	Annual Sales (number of products)
1	490	5	461
2	487	6	475
3	492	7	472
4	478	8	458

Use simple linear regression to forecast annual demand for the products for each of the next three (3) years, by using the tabular method to:

1. derive the values for the intercept and slope
2. derive the linear equation
3. plot the linear regression line
4. develop a forecast for the firm’s annual sales for each of the next three years

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