MAT 12-The quarterly sales data (number of book sold)

Homework 2
Review chapter 6.5: Seasonality (pp. 223-229) and answer the following questions.
The quarterly sales data (number of book sold) for Christian book over the past three years in California
follow: You must use Excel to compute the time series (regression) equation
Quarter
Year1
Year2
Year3
1
1690
1800
1850
2
940
900
1100
3
2625
2900
2930
4
2500
2360
2615
1. Construct a time series plot. What type of pattern exists in the data?
2. Use the following dummy variables to develop an estimated regression equation to account for any
seasonal effects in the data: Quarter1=1 if the sales data point is in Quarter 1, otherwise Quarter 1=0;
Quarter 2=1 if the sales data point is in Quarter 2, otherwise, Quarter 2=0; Quarter 3=1 if the sales
data point is in Quarter 3, otherwise Quarter 3=0.
3. Compute the quarterly forecasts for next year.
4. Let t=1 to refer to the observation in quarter 1 of year 1; t=2 to refer to the observation in quarter 2 of
year 1;,,,,and t=12 to refer to the observation in quarter 4 of year 3. Using the dummy variables
defined in part (b) and t, develop an estimated regression equation to account for seasonable effects
and any linear trend in the time series. Based upon the seasonal effects in the data and linear trend,
compute the quarterly forecasts for next year.
5. This is an open-ended essay question. Based on the result in 4, what factors might lead to the highest
Christian book sales in quarter 3? You may quote bible verses in 2 Corinthians 9:10 or Colossians
1:10.