Doing the forecast
To build the forecast, we follow the same steps that we saw earlier when testing the model:
- Get the seasonal trend for each quarter from 2018 to 2019.
- Calculate the trend for 2018 to 2019 using the regression line.
- Forecast by multiplying the seasonal trend by the regression.
The forecast chart reveals that car sales keep growing, following the trend with a season fall in the fourth quarter. We see that the data has two components:
- A seasonal component with the sales fluctuation amount quarters
- A trend component that indicates the sales growth each year
To do the forecast, we calculate the seasonal trend and the regression trend. The highlighted data in Figure 13.8 shows the calculations to apply the model to make a forecast for the years 2018 and 2019:
Figure 13.8 – Using the forecast for automobile sales for 2018–2019
The forecast model makes a good prediction for the years 2018...
