Sales Forecast Modeling

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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