Sales Forecasting

question 35

Essay

Sales Forecasting. The World Bazaar, Ltd., must forecast sales for indoor electric grills in order to avoid stockouts or excessive inventory charges during the coming Christmas season. In percentage terms, the company estimates that electric grill sales fall at triple the rate of price increases and grow at three times the rate of customer traffic increases. Furthermore, these effects seem to be independent.
A. Write an equation for estimating the Christmas season sales, using the symbols S = sales, P = price, T = traffic, and t = time.
B. Forecast this season's sales if the World Bazaar sold 500,000 indoor electric grills last season at $40 each, this season's price is anticipated to be $45, and customer traffic is expected to rise by 15% over previous levels.

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Definitions:

Trinomial

An algebraic expression made up of three terms.

Factored Form

Expressing a polynomial as a product of its factors, which can be simpler polynomials or constants.

Factor

A number or algebraic expression that divides another number or expression evenly, with no remainder.

Trinomial

A polynomial consisting of three terms or monomials, often in the form ax^2 + bx + c.