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).