Question

R value = -0.66

R2 = 0.4356.

This means that 43.56% of the variability in the sales can be explained by the variability in the explanatory variable. This number is on the lower side and doesnt really help to forecast well.

1. The following three techniques can be used for forecasting

1. Autoregression (AR)
2. Moving Average (MA)
3. Autoregressive Moving Average (ARMA)

2.

R2 = 0.4356.

This means that 43.56% of the variability in the sales can be explained by the variability in the explanatory variable. This number is on the lower side and doesnt really help to forecast sales well.

Therefore, no the model is not good to forecast the sales.

3. We can increase the number of observations used in the model or we can increase the number of explanatory variables used in the model. In this way , we can better explain the variability in the sales & thus improve the R2. This will in turn help us to improve the forecasting accuracy of sales.

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