Using simple linear regression, what is the forecast for week 22?

Question

You have been given the demand data for the past 10 weeks for swim rings for children. You decide to run three different types of forecasting methods on the data to see which gives you best forecast. Using simple linear regression, what is the forecast for week 22?

Week	Demand
12	1317
13	1307
14	1261
15	1258
16	1267
17	1256
18	1268
19	1277
20	1277
21	1297

 

Answer 1

First build a linear regression model using weeks 12 through 21 data. Using excel (or another software) gives the following (estimated) regression line: Demand = 1307.6 - 1.76 * Week.

Now, plug in Week=22 in above equation, which gives: Demand ≅ 1268.8.