Sales Forecast Modeling

question 21

Essay

Sales Forecast Modeling. Engineering Consultants, Inc., 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 manufacturer:
A. Write an equation for predicting sales based on the assumption that the percentage change in sales is one-and-a-half as large as the percentage change in income and advertising; but only one-half 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 $750,000, income is $71,750 per capita, advertising is $75,000, and competitor advertising is $100,000. Previous period levels were $70,000 (income), $60,000 (advertising), and $80,000 (competitor advertising). Forecast next year sales.

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Definitions:

Tradable Environmental Permits

Market-based instruments allowing for the buying and selling of pollution allowances, aiming to reduce harmful emissions cost-effectively.

Disadvantages

The negative or less favorable aspects of something that may hinder progress, success, or satisfaction in certain contexts.

Production

Production is the process of combining various material inputs and immaterial inputs (plans, know-how) in order to make something for consumption (output).

Consumption

The act of using up a resource or goods, often related to economic spending or food intake.