Introduction to Management Science 12th Edition by Bernard Taylor

Exercise 36

In Problem, Infoworks believes its printer sales are also related to the average price of its printers. It has collected historical data on average printer prices for the past 10 years, as follows:
a. Using Excel, develop the multiple regression equation for these data.
b. What is the coefficient of determination for this regression equation
c. Determine the forecast for printer sales, based on personal computer sales of 1,500 units and an average printer price of $300.
Problem
Infoworks is a large computer discount store that sells computers and ancillary equipment and software in the town where State University is located. Infoworks has collected historical data on computer sales and printer sales for the past 10 years, as follows:
a. Develop a linear trend line forecast to forecast printer demand in year 11.
b. Develop a linear regression model relating printer sales to computer sales in order to forecast printer demand in year 11, if 1,300 computers are sold.
c. Compare the forecasts developed in (a) and (b) and indicate which one appears to be more accurate.