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Question: many supply managers use a monthly reported survey result known...

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Many supply managers use a monthly reported survey result known as the purchasing managers’ index (PMI) as a leading indicator to forecast future sales for their businesses. Suppose that the PMI and your business sales data for the last 10 months are the following:

month 1 2 3 4 5 6 7 8 9 10
PM 43 43.1 41.5 38.5 40.5 45.2 46.2 48.1 49 53
sales(in($000) 122 124 125 123 119 120 125 127 135 136

A. Develop a regression model that can be used by supply managers in forecasting future sales for businesses. Explain what forecasting model approach you used and why you chose it. Show complete work (cut and paste from Excel if used in the analysis). (10 points)

B. Develop a sales forecast for the 11th and 12th months using the model you developed in part A when PMIs are 52 and 50, respectively. (10 points)

Please show all calculations

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