past year (Council of Economic Advisers, 1994, p. 8). Increases in wages have generally exceeded inflation, a state of affairs that generally is favorable to retail sales.
The gross national product (GNP) has been increasing steadily in 1994 (Council of Economic Advisers, 1994, p. 2). GNP growth generally is favorable to retail sales.
Demand Forecasts for Wal Mart Products
Sales for Wal Mart Stores in the United States are forecast for 1995 through the application of times series analysis, barometric economic indicator analysis, and econometric analysis. Each of these forecasts is presented in separate discussions.
A forecast is an estimate of the future value, or future values, of a variable (Webster, 1991, p. 6). To be meaningful, forecasts must project values of a variable in measurable units of the variable. A number of procedures exist by which forecasts may be developed. The best forecasts are those developed through the application of statistical procedures. Among the major statistical forecasting procedures are the following:
1. Trend line projections. 2. Cyclic demand projections, which consider random variations, and which require the use of multiple regression equations.
3. Curvilinear regression projections, which consider multiple relationships among many variables.
Trend analysis is one approach to time series projection (Pappas and Brigham, 1994, p. 138). Time series projection may be as uncomplicated as the projection of an unadjusted trend, or it may be based upon more sophisticated adjustments for seasonal and cyclical patterns. In either case, or in some middle ground case, such as the application of least squares curve fitting (regression) to time series data, to project future values of a variable, a future trend is projected.
The simplest of the quantitative techniques which may be used in forecasting is the fitting of a trend li...