The methods used are diverse and vary depending on the activity of the company. Forecasts can be based on information provided by commercial sources, supplemented by various statistics. The linear correlation establishes a relationship or index of dependence between the change in sales (denoted as "Y") and a known variable (denoted as "X") that may, for example, be an advertising budget, or a number of client visits.
[...] Positive linear correlation: Here, the curve is constant and X and Y vary simultaneously in the same direction (growth leads to growth of X of Y). When there is a strong correlation between the observed variables X and Y. Negative linear correlation: Here the curve is decreasing, and X and Y vary simultaneously, but in the opposite direction (an increase in X causes a decrease of Y). When - 0.8 [...]
[...] The slope of the line is calculated using the formula: a = S (xi - (yi - / S (xi - ^ 2 (Or c is x bar and y bar). The regression line passes necessarily by the coordinates which allows to write the equation. = b a c 2. Interpretation and prediction The regression line determined from X to Y. One can interpret the regression coefficients by noting that X refers to a fixed part and a variable part (ax). [...]
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