Sales Forecast Modeling

question 46

Essay

Sales Forecast Modeling. Kerry Weaver, office manager for Pediatric Medicine, Ltd., would like to generate a sales forecast based on the assumption that next year sales are a function of current income, advertising, and advertising by a competing local hospital:
A. Write an equation for predicting sales based on the assumption that the percentage change in sales is three times as large as the percentage change in income and advertising; but only one-fourth as large as, and of the opposite sign of, the percentage change in competitor advertising. Use the symbols S = sales, Y = income, A = advertising, and CA = competitor advertising.
B. During the current year, sales total $1,000,000, local disposable income is $78,750 per household, advertising is $90,000, and competitor advertising is $100,000. Previous period levels were $75,000 (income), $80,000 (advertising), and $125,000 (competitor advertising). Forecast next year sales.

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Definitions:

Societal-Based Subcultures

Distinct cultural groups formed within a larger society based on shared beliefs, values, or interests, influencing behaviors and identities.

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Management Influences

The impact that leadership and managerial practices have on the direction, productivity, and morale of an organization or team.

Innovation Process

The sequence of activities involved in the development, prototyping, and implementation of new ideas, products, or technologies.