Statistical Analysis on least square equation and plot net sales and trend line

1.                  Listed below is the net sales in $ million for home Depot, Inc. and its subsidiaries from 1997 to 2006.

Table 1: Net sales of different years

Year	Net Sales ($)	Year	Net Sales ($)
1997	50,600	2002	156,700
1998	67,300	2003	201,400
1999	80,800	2004	227,300
2000	98,100	2005	256,300
2001	124,400	2006	280,900

Note: Add last three digits of your ID with Net Sales

i)                    Determine the least square equation. On the basis of this information, what are the estimated sales for 2010?

ii)                  Plot Net Sales and Trend Line

 

 

Year	Net Sale($)	Time(t)	Net Sales + ID(047)	Y=a+bt
1997	$    50,600.00	1	$                   50,647.00	$    32,847.00
1998	$    67,300.00	2	$                   67,347.00	$    59,940.00
1999	$    80,800.00	3	$                   80,847.00	$    87,033.00
2000	$    98,100.00	4	$                   98,147.00	$  114,126.00
2001	$  124,400.00	5	$                124,447.00	$  141,219.00
2002	$  156,700.00	6	$                156,747.00	$  168,312.00
2003	$  201,400.00	7	$                201,447.00	$  195,405.00
2004	$  227,300.00	8	$                227,347.00	$  222,498.00
2005	$  256,300.00	9	$                256,347.00	$  249,591.00
2006	$  280,900.00	10	$                280,947.00	$  276,684.00

 

I)  The least square equation for Net sales ($) is, y’=a +bt=27039t + 5413

The value 5413 is the estimated value of sales in the year 0 or base year (1996).

The value 27039 tells us that sales increased at a rate of 27039 per year.

Thus on the basis of past sales the estimated or expected or projected sales for 2010 will be

 Y’= a+bt= 5413+27039*14

                =383959 ($) million