The owner of a local construction company that specializes - 11430

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mareya

mareya

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Request Description

The owner of a local construction company that specializes in outdoor structures desires to make a prediction regarding the next business year sales. Expansion of the business is one possible decision that could be made. It has been determined that the business needs to be at least $8 million dollars in annual sales before expansion could be considered. The following is data for the past 6 years. (Sales in millions of dollars.)

YearSalesYearSales

20047.4520077.94

20057.8320087.76

20068.0720097.90

The statistical analysis of the data produced this least square trend equation. 

Y' = 7.634 + 0.05457t 

What should the owner's decision be regarding expansion in 2010? 

A. Expansion decision could go either way based on data

B. Cannot make a decision based on this data

C. Expansion should be considered

D. Expansion should be delayed

 
Solution Description

The owner of a local construction company that specializes in outdoor structures desires to make a prediction regarding the next business year sales. Expansion of the business is one possible decision that could be made. It has been determined that the business needs to be at least $8 million dollars in annual sales before expansion could be considered. The following is data for the past 6 years. (Sales in millions of dollars.)