Question

In: Statistics and Probability

Shown here are Caterpillar's annual global sales and revenue streams for the years 2004 through 2014....

Shown here are Caterpillar's annual global sales and revenue streams for the years 2004 through 2014. By observing the data graphically and analyzing the data statistically using techniques and concepts from this chapter (forecasting trend line, etc.), share your insights and conclusions about Caterpillar's annual global sales and revenue streams over this period of time.

YEAR SALES AND REVENUE STREAMS ($ BILLIONS)
2004 30.31
2005 36.34
2006 41.52
2007 44.96
2008 51.32
2009 32.40
2010 42.59
2011 60.14
2012 65.88
2013 55.66
2014 55.18

Solutions

Expert Solution

ANSWER::

The best way to project the data in the form of graphically and analyzing data statistically is time series trend model

Forecast vs Actual:

Forecast is the average sales and revenue from year 2004 to 2014. Actuals are the real sales numbers and comparison of forecast and actuals and differences are projected in the first graph.

Second graph is used to predict the sales for the future year. The graph is showing the least square regression equation on the chart. which will help to predict the numbers

Formula reference:

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