The following table lists your company's sales during the last four years.
|
|
Year 1
|
Year 2
|
Year 3
|
Year 4
|
|
Sales
|
100
|
110
|
105
|
120
|
a. A fellow manager points to the 15-unit increase between year 3 and year 4. Extrapolating this trend, he predicts 135 units will be sold in the coming year (year 5). Do you agree? Explain.
b. A second manager notes that annual sales increases have averaged (120 - 100)/3 = 6.67 units per year. Accordingly, his forecast for the coming year is 126.67 units sold. Do you agree with this prediction? Explain.