A toy manufacturer has excellent sales figures for its toys in country A, but inadequate figures in the neighboring country B. In country A, per capita consumption is known to increase at a predictable ratio as per capita gross domestic product (GDP) increases. If per capita GDP is known for country B, per capita demand for the toys can be estimated using the relationships established in country A. Which of the following methods of forecasting does this example illustrate?

Question

Quizplus · Accepted Answer

This example illustrates analogy forecasting, where the relationship between variables (per capita GDP and per capita consumption of toys) observed in one context (country A) is used to predict outcomes in a similar context (country B).

A Toy Manufacturer Has Excellent Sales Figures for Its Toys