Essentials Of Business Analytics
1st Edition
ISBN: 9781285187273
Author: Camm, Jeff.
Publisher: Cengage Learning,
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Textbook Question
Chapter 5, Problem 26P
South Shore Construction builds permanent docks and seawalls along the southern shore of Long Island, New York. Although the firm has been in business only five years, revenue has increased from $308,000 in the first year of operation to $1,084,000 in the most recent year. The following data show the quarterly sales revenue in thousands of dollars:
- a. Construct a time series plot. What type of pattern exists in the data?
- b. Use a multiple regression model with dummy variables as follows to develop an equation to account for seasonal effects in the data: Qtr1 = 1 if quarter I, 0 otherwise; Qtr2 = 1 if quarter 2, 0 otherwise; Qtr3 = 1 if quarter 3, 0 otherwise.
- c. Based on the model you developed in part (b), compute estimates of quarterly sales for year 6.
- d. Let Period = 1 refer to the observation in quarter 1 of year 1; Period = 2 refer to the observation in quarter 2 of year 1; … and Period = 20 refer to the observation in quarter 4 of year 5. Using the dummy variables defined in part (b) and the variable Period, develop an equation to account for seasonal effects and any linear trend in the time series.
- e. Based on the seasonal effects in the data and linear trend estimated in part (c), compute estimates of quarterly sales for year 6.
- f. Is the model you developed in part (b) or the model you developed in part (d) more effective? Justify your answer.
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Check out a sample textbook solutionStudents have asked these similar questions
Year
No. of Eastern Bluebird
1970
200
1975
300
1980
125
1985
250
1990
425
1995
450
2000
575
2005
675
2010
500
a) Make a scatter plot of the number of birds vs. year record.
b) Create a table with this data that compares Years Since 1900 vs. the number of birds. Fill in extra columns for Years-Since-Squared and Years*Birds. Complete the table by adding rows for column totals and column averages.
c) Calculate the linear regression for this model.
e) Calculate the correlation coefficient for this model.
f) Translate your linear regression so that the model is now Year vs. Number of birds.
g) Add the model to your scatter plot.
h) Compute the residual errors for your model.
i) Plot your residual errors.
j) Interpolate your model to find the number of birds in 1983 and 2001.
Suppose a firm has had the following historic sales figures.
Year:
2016
2017
2018
2019
2020
Sales $2,430,000 $3,650,000 $4,300,000 $5,010,000 $5,660,000
What would be the forecast for next year's sales using regression to estimate a trend?
Next year's sales
Chapter 5 Solutions
Essentials Of Business Analytics
Ch. 5 - Consider the following time series data:
Using...Ch. 5 - Refer to the time series data in Problem 1. Using...Ch. 5 - Problems 1 and 2 used different forecasting...Ch. 5 - Consider the following time series data:
Compute...Ch. 5 - Consider the following time series...Ch. 5 - Consider the following time series...Ch. 5 - Prob. 8PCh. 5 - Prob. 9PCh. 5 - Prob. 10PCh. 5 - For the Hawkins Company, the monthly percentages...
Ch. 5 - Corporate triple A bond interest rates for 12...Ch. 5 - The values of Alabama building contracts (in...Ch. 5 - The following time series shows the sales of a...Ch. 5 - Prob. 15PCh. 5 - The following table reports the percentage of...Ch. 5 - Consider the following time series: a. Construct a...Ch. 5 - Consider the following time series:
Construct a...Ch. 5 - The Seneca Children’s Fund (SCF) is a local...Ch. 5 - The president of a small manufacturing firm is...Ch. 5 - Consider the following time series: a. Construct a...Ch. 5 - Consider the following time series...Ch. 5 - The quarterly sales data (number of copies sold)...Ch. 5 - Prob. 25PCh. 5 - South Shore Construction builds permanent docks...Ch. 5 - Hogs & Dawgs is an ice cream parlor on the border...Ch. 5 - Donna Nickles manages a gasoline station on the...Ch. 5 - The Vintage Restaurant, on Captiva Island near...
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