Sales Forecast Modeling

question 38

Essay

Sales Forecast Modeling. The change in the quantity of product A demanded in any given week is inversely proportional to the change in sales of product B in the previous week. That is, if sales of B rose by X percent last week, sales of A can be expected to fall by X percent this week.
A. Write the equation for next week's sales of A, using the symbols A = sales of Product A, B = sales of Product B, and t = time. Assume there will be no shortages of either product.
B. Last week 500 units of A and 250 units of B were sold. Two weeks ago, 200 units of Product B were sold. What would you predict the sales of A to be this week?

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Definitions:

Contribution Margin

The amount remaining from sales revenue after variable costs are deducted, indicating how much contributes to covering fixed costs and generating profit.

Wholesale Distributor

A business that buys goods in large quantities from manufacturers and resells them in smaller quantities to retailers or other businesses.

Educational CD-ROMs

Digital storage media used to store and access educational content and interactive learning programs.

Production Volume

The quantity of products manufactured or processed in a given period, reflecting the scale of operations and efficiency of production processes.