Sales Forecast Modeling

question 23

Essay

Sales Forecast Modeling. Jeng-Mei Chen, Inc., an upscale Manhattan restaurant, 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 restaurant:
A. Write an equation for predicting sales based on the assumption that the percentage change in sales is twice 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 $2,000,000, income is $84,700 per capita, advertising is $500,000, and competitor advertising is $300,000. Previous period levels were $77,000 (income), $400,000 (advertising), and $400,000 (competitor advertising). Forecast next year sales.

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Definitions:

Access

A Microsoft-developed database management system that integrates the Microsoft Jet Database Engine's relational capabilities with graphical user interface and tools for software development.

Contribution

The act of giving or supplying something, such as resources, ideas, or efforts, to a common pool or a specific project.

Total Company Sales

The total revenue generated from all sources by a company within a specific period.

Access Report

A feature in Microsoft Access that allows users to create formatted, printable reports from data stored in a database.