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
In the following table, the heights and salaries of the knights of 12 kingdoms have been collected. In the table, the lengths are in centimeters and the wages are in the monetary unit of the kingdom in question.
(This is the table)
Lenght Salary183 100160 92196 106186 92195 109182 101208 116169 96166 94198 101145 93168 96
So the questions regarding this table would be: (a) Fit a linear regression model to the data and determine its PNS estimates αˆ and βˆ.(b) Calculate the prediction for a knight's salary when that knight is 181 centimeters tall.(c) Estimate the variance parameter σ2 of the linear model.
R software or other software for linear regressions should not be used to solve this.
Consider the following time series:
Quarter
Year 1
Year 2
Year 3
1
66
63
57
2
48
40
50
3
59
61
54
4
73
76
67
(a)
Choose a time series plot.
(i)
(ii)
(iii)
(iv)
What type of pattern exists in the data? Is there an indication of a seasonal pattern?
(b)
Use a multiple linear regression model with dummy variables as follows to develop an equation to account for seasonal effects in the data: Qtr1 = 1 if quarter 1, 0 otherwise; Qtr2 = 1 if quarter 2, 0 otherwise; Qtr3 = 1 if quarter 3, 0 otherwise. For subtractive or negative numbers use a minus sign even if there is a + sign before the blank (Example: -300).
ŷ = ?? + ?? Qtr1 +?? Qtr2 + ?? Qtr3
(c)
Compute the quarterly forecasts for next year.
Year
Quarter
Ft
4
1
4
2
4
3
4
4
The president of small manufacturing firm is concerned about the continual increase in manufacturing costs over the past several years. The following figures provide a time series of the cost per unit for the firm’s leading product over the past eight years.
Year
Cost/Unit ($)
Year
Cost/Unit ($)
1
20.00
5
26.60
2
24.50
6
30.00
3
28.20
7
31.00
4
27.50
8
36.00
Construct a time series plot. What type of pattern exists in the data?
Use simple linear regression analysis to find the parameters for the line that minimizes MSE for this time series.
What is the average cost increase that the firm has been realizing per year?
Compute an estimate of the cost/unit for next year.
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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