Business Mathematics Brief 12th Edition by Stanley Salzman ,Gary Clendenen, Charles Miller

Exercise 67

Facts:
• 1908: Founded
• 1970s: Massive redesign of cars for better gas mileage
• 1982: Built huge factory in Spain
• 2009: Files for bankruptcy
• 2010: Emerges from bankruptcy
In some respects, General Motors (GM) is the story of globalization. It was one of the most successful companies in the world in the 1960s under the gifted manager Alfred Sloan. As it expanded globally, some of the jobs that had gone to Americans were moved overseas, partly to be closer to where vehicles were sold but also to cut costs. Labor costs were much lower in other countries.
Gasoline prices increased sharply during the 1970s and many Americans turned away from GM products and bought cars from Toyota, Honda, or Nissan. Americans were interested in the smaller, high-quality cars built by the Japanese. The weakened state of GM and the financial crisis of 2008-2010 forced the company to file for bankruptcy in 2009 when the U.S. government stepped in to help.
Ben James received a bachelor's degree in statistics and a master's degree in business administration. He has worked at GM for several years. Among other things, he studies data such as that shown in the following two figures and develops equations to forecast demand.

Many factors are involved in making a forecast. To illustrate, use the following equation to make a monthly forecast of car sales (in thousands) in one area Advertising = $6.2(millions), Economic Growth = 2.8%(0.28), and level of Competition =.6. (See Section 4.2, Examples 1-8.)