Question

A company hires you to develop a linear regression forecasting model. Based on the company's historical sales information, you determine the intercept value of the model to be 1,200. You also find the slope value is minus 50. If after developing the model you are given a value of X= 10, which of the following is the resulting forecast value using this model?

a. - 3,800
b. 700
c. 1,700
d. 1,040
e. 12,000

Answer 1

Option "B" is the correct answer to the following statement.

Step-by-step explanation:

Given:

Intercept value of the model (a) = 1,200

Slope value (b) = -50

Value of X = 10

Forecasting value (Y) = ?

Computation:

We know that , in linear regression forecasting

Y = a + b(X)

by putting the value in equation

Y = 1,200 + (-50)(10)

Y = 1,200 - 500

Y = 700

Therefore, forecasting result will be 700.