This curve features alternate increase and decrease. To calculate forecast figures we use the formula: =304.52*LN(A18)+101.57, where A18 is period number. To do this, put period number instead of x in the equation. Let’s forecast sales volume for further periods. R2 is close in value to 1 (0.9558), indicating the minimum error of approximation. Make a chart and add a logarithmic trend line for a conditional product sales forecast: When the goods have their buyer, it will be necessary to hold and serve him. The initial task of the manufacturer is to expand the customer base. The logarithmic trend is suitable for forecasting sales of a new product that has just entered the market. The optimized curve adapts well to this value "behavior". It is used for the following indicator changes: first, rapid growth or decrease, then - relative stability. The indicator of R-squared value is 0.938, which means that the curve corresponds to the data, the error is minimal, and the forecasts will be accurate. Take for example the conditional values of electric power supply in X region: Let’s create an exponential trendline in Excel. Exponential approximation is not applied if there are zero or negative characteristics. This type is useful if the input values change with increasing speed. After calculating, we find out that in period 11 the manager will conclude 55-56 contracts. To predict the number of concluded contracts, for example, in period 11, it is necessary to put number 11 instead of x in the equation. The R-squared value is equal to 0.9929, indicating a good agreement between the calculated straight line and the source data. The straight line on the graph shows a steady increase in the quality of the manager's job. Note that in the linear approximation type data points are located very close to the line. Add the R-squared value and the equation of a trendline (simply tick the box at the bottom of the «Options» window). Highlight the chart, select «Add Trendline».
Let’s consider the conditional number of contracts concluded by a manager for 10 months:īased on the Excel spreadsheet data make a scatter chart (it will help illustrate a linear type): Hence, linear approximation is used to illustrate the indicator which increases or decreases at a constant rate. Its geometric representation is a straight line. It is necessary to choose the type of representation that will best illustrates the trend of changes in the data entered by the user. The R-squared value demonstrates that the choice has not been successful. In the example above the linear approximation has been chosen only for illustrating the algorithm. Note: that a trendline can not be added to the following types of charts and graphs: In our example, the choice of the linear approximation has given a low accuracy and poor result. If R2 = 1, the approximation error is zero. To this end, we need to extend the line and determine its values. It is used for making predictions based on statistical data. Trendline in Excel is an approximating function chart. Select the line type and enter R-squared value (the approximation accuracy value) in the chart. The window for setting line parameters opens.The horizontal direction represents year, and the vertical one shows price. Choose a simple graph out of the offered chart types. Select the range A1:P2 and click on the «Insert»-«Charts»-«Insert Line Chart»-«Line». Create a chart based on the spreadsheet.Type the analysis data in the spreadsheet: The graph will then appear on your worksheet.For example, let’s take average oil prices since 2000 from open sources. Select all the cells you have entered data into, including your header.Ĭlick the "Insert" tab, click "Scatter" in the Charts area and then click the type of graph you need. As you do this, the column will automatically populate with the solutions to each function, based on the value of x in column A. Make sure each of your x values has a corresponding function to the right of it. Select cell B2 and then drag to copy the formula down the column with the same method you used in step 2. Replace "50" with your sale price and "3500" with your costs. For example, to determine the number of sales you need to make of a certain product to cover costs, you could use: Type an equal sign "=" into cell B2 and then type your formula directly after it, without leaving a space. Select both of these cells and then click and drag the small black square in the lower-right corner of the selection area downwards until you have as many values as you want to plot. For example, if your intervals are whole numbers, you might start by entering "1" into cell A2 and "2" into cell A3. Enter the first and second interval of your input variable (for example, "x" or "sales"), which you'll use to plot the function.
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