Regression Analysis

Month Sales
1 10
2 12
3 15
4 14
5 16

a. Determine the regression line that fits the data

t Xt tXt t2
1 10 10 1
2 12 24 4
3 15 45 9
4 14 56 16
5 16 80 25
∑ 67 215 55

The regression line:

b. Calculate the standard error of the estimate

t Xt Ft Xt - Ft (Xt - Ft)2
1 10 10.6 -0.6 0.36
2 12 12 0 0
3 15 13.4 1.6 2.56
4 14 14.8 -0.8 0.64
5 16 16.2 -0.2 0.04
∑ 3.6

c. Forecast for Month 6

d. Graph