Question: On a yearly basis, Professor Jane Mcintosh organizes a maraton fundraiser for her school. The revenue comes from runner participation fees to cover security and fundraising costs.
A new sponsor has come on board, and they are willing also manage the operations of the ride. Having no prior experience, this sponsor created a website for runners to register but did not add a payment feature. Fees would be paid on the morning of the ride. This year's souvenir is an expensive European running jersey. Jane tells the sponsor about the dilemma. They have to pre-order the jerseys from the supplier for the number of registered runners but won't collect the funds until the morning of the run. This arrangement also encourages riders not to register but just show up the morning of the run. The sponsor wants to know why that is a problem. Jane tells the sponsor that if it rains, they can expect to have many runners not show up and be stuck with many jerseys. The cost of the jerseys left over will come out of the fundraising profits.
To decrease losses, the sponsor plans to order jerseys based on an assumption it will rain. Most jerseys commissioned in the past were for Unisex Medium.Jane provides the sponsor with the following data for years that it rained. Since the ride occurs in early April, there have been many rainy runs.
|
Year
|
Orders Medium
Unisex Jersey
|
|
2001
|
150
|
|
2003
|
158
|
|
2005
|
165
|
|
2007
|
180
|
|
2009
|
195
|
|
2012
|
207
|
|
2014
|
215
|
|
2015
|
222
|
1) Compute the forecasted demand for Medium unisex jerseys for 2016 assuming it will rain using the least squares trend equation. Please show the formulas used and all calculations.