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Estimating sales by extrapolating from one year to the next using the change in population...

Discussion in 'Education' started by StatsScared, Oct 8, 2018.

  1. StatsScared

    StatsScared Guest

    Would the below be a reasonable approach to extrapolate aggregate sales for item X from 2017 to 2018?

    • Sales of item X in 2017 (in euros): 5,364
    • Population increase (of target population that buys item x) from 2017 to 2018: 5.30%
    • CPI/Inflation price increase from 2017 to 2018: 12.1%

    Estimated Sale of item X in 2018: 6331.74 (= 5,364 * ( 1+5.30%) * ( 1+12.1%))


    I was provided this example but I am not completely sure of the approach. Why use population growth? And why not extrapolate by using quantity growth instead (estimate for 2018 = 2017 value * growth of prices * growth of quantity).

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