Suppose a Plot of Sales Data Over Time Appears to Follow

Multiple Choice

Suppose a plot of sales data over time appears to follow an S-shape as illustrated on the next page. Which of the following is likely that the best forecasting functional form to use for sales data above?

A) A linear trend, Sales = a + bT
B) A quadratic shape in T, using T-squared as another variable, Sales = a + bT + cT².
C) A semi-log form as sales appear to be growing at a constant percentage rate, Ln Sales = a + bT
D) A cubic shape in T, using T-squared and T-cubed as variables, Sales = a + bT + cT² + dT³.
E) A quadratic shape in T and T-squared as variables, Sales = a + bT + cT²