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# Quarterly Sales Forecasting Model

Created by
@IllustriousSuprematism

## Questions and Answers

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

To account for the second quarter's deviation from the overall trend

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

2005 I - 2015 III

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

There is no statistically significant trend in sales

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

<p>0</p> Signup and view all the answers

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

<p>43</p> Signup and view all the answers

## 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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## Description

A consulting firm estimates a quarterly sales forecasting model with a dummy variable for the second quarter. Is there a statistically significant trend in sales?

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