The owner of Darkest Tans Unlimited in a local mall is forecasting this month's (October's) demand for the one new tanning booth based on the following historical data: $$\begin{array} { l l }
\text { Month } & \text { Number of Visits } \
\hline \text { April } & 100 \
\text { May } & 140 \
\text { June } & 110 \
\text { July } & 150 \
\text { August } & 120 \
\text { September } & 160
\end{array}$$ What is this month's forecast using the least squares trend line for these data?
A) 1,250
B) 128.6
C) 102
D) 158
E) 164

Question

The owner of Darkest Tans Unlimited in a local mall is forecasting this month's (October's) demand for the one new tanning booth based on the following historical data: $$\begin{array} { l l } 
\text { Month } & \text { Number of Visits } \
\hline  \text { April } & 100 \
\text { May } & 140 \
\text { June } & 110 \
\text { July } & 150 \
\text { August } & 120 \
\text { September } & 160
\end{array}$$ What is this month's forecast using the least squares trend line for these data?
A) 1,250
B) 128.6
C) 102
D) 158
E) 164

Quizplus · Accepted Answer

The least squares trend line for these data is:$$y = 10 + 10x$$where x is the month number (April = 1, May = 2, etc.).This month (October) is month number 10, so the forecast is:$$y = 10 + 10(10) = 120$$

The Owner of Darkest Tans Unlimited in a Local Mall