Quarterly Sales Forecasting Model

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Questions and Answers

What is the purpose of the dummy variable D in the sales forecasting model?

  • To control for the effect of the first quarter on sales
  • To account for the second quarter's deviation from the overall trend (correct)
  • To estimate the sales for the entire year
  • To capture the seasonal fluctuations in sales

What is the time period for which the quarterly data is used to estimate the sales forecasting model?

  • 2000 I - 2005 III
  • 2010 I - 2015 III
  • 2005 I - 2015 III (correct)
  • 2005 I - 2010 IV

At the 1 percent level of significance, what can be concluded about the trend in sales?

  • The trend in sales cannot be determined from the given information
  • There is a statistically significant downward trend in sales
  • There is no statistically significant trend in sales (correct)
  • There is a statistically significant upward trend in sales

What is the value of the dummy variable D in the first quarter?

<p>0 (C)</p> Signup and view all the answers

How many observations are used to estimate the sales forecasting model?

<p>43 (A)</p> Signup and view all the answers

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Study Notes

Sales Forecasting Model

  • The consulting firm uses a quarterly sales forecasting model in the form of Qt = a + bt + cD, where Qt is the quarterly sales and t is the time period.

Model Estimation

  • The model is estimated using quarterly data from 2005 I to 2015 III, which covers 43 time periods (t = 1, ..., 43).

Dummy Variable

  • The variable D is a dummy variable that represents the second quarter, with a value of 1 in the second quarter and 0 otherwise.

Estimation Results

  • (Note: The estimation results are not provided, but the question asks about the significance of the trend in sales at the 1% level.)

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