Linear Trend Forecasting

COMM 225: PRODUCTION & OPERATIONS MANAGEMENT CHAPTER 3: DEMAND FORECASTING 📈 Linear trend forecasting can be used to analyze data with an upward or downward trend. 📊 It is important to have at least four or five data points to make sense of the trend. 📉 Excel can be used to create a scatter or line chart to visualize the trend and generate an equation for forecasting. 📝 The linear trend equation is yhat = a + bx, where "a" is the y intercept and "b" is the slope of "x" and "x" is the period being forecasted. 📝 The slope "b" can be calculated using the equation: b = (nΣ(xy) - ΣxΣy) / (nΣ(x^2) - (Σx)^2) 📝 The y intercept "a" can be calculated using the equation: a = (Σy - bΣx) / n