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A manager is using the following linear trend equation to forecast quarterly demand for a product:

Ft = 6,000 + 80t where t = 0 at Q1 of this year.

a.) Forecast the demand for the last quarter of this year and the first quarter of next year?

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Final answer:

To forecast the demand for Q4 this year, t is set to 3 in the trend equation, resulting in a demand of 6,240. For Q1 of next year, t is set to 4, giving a forecasted demand of 6,320.

Step-by-step explanation:

To forecast the demand for the last quarter of this year using the given linear trend equation Ft = 6,000 + 80t, where t represents the time period in quarters and t = 0 at Q1 of this year, we need to calculate the time period for the last quarter of this year. Since the last quarter is Q4 and t = 0 at Q1, t would be 3 for Q4 (as it is the fourth quarter, hence 3 quarters after Q1). Plugging t = 3 into the equation gives us Ft = 6,000 + 80(3) = 6,240. Similarly, for the first quarter of the next year, t = 4, as it is one quarter after Q4, resulting in a forecasted demand of Ft = 6,000 + 80(4) = 6,320.

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