Consider the following time series data. Quarter Year 1 Year 2 Year 3 1 5 8 10 2 4 8 2 3 1 4 6 4 3 6 8 (a) Choose the correct time series plot. (i) 12 11 10 9 7 Time Series Values 1 0 Year Year 1 Your Year 1 Year 2 Year 2 Year 2 Year 2 Year Year 3. Year Quarter 1 Quarter 2 Quarter 3 Quarter 4 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Quarter Quarter 2 Quarter 3 Quarter 4 Time Period (ii) 12 11 10 9 8 7 Time Series Values Year Year Your Year 1 Year 2 Year 2 Year 2 Year 2 Year 3. Year 3 Year 3 Year 3 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Quarter 1 Quarter 2 Quarter 3 Quarter & Quarter 1 Quarter 2 Quarter 3 Quarter 4 Time Period (ii) 12 11 10 8 2 6 Time Series Values Year 1 Year 1 You 1 Year 1 Year 2 Year 2 Year 2 Year 2 Year 3 Year 3. Year 3. Year Quarter 1 Quarter 2 Quarter 3 Quarter 4 Quarter 1 Quarter 2 Quarter 3 Quarter & Quarter 1 Quarter 2 Quarter 3 Quarter 4 Time Period (iii) 12 11 10 9 7 6 5 Time Series Values 1 0 Years Year1 Your Year 1 Year 2. Year 2 Year 2 Year 2 Year 3 Year Year 3. Year 3. Quarter 1 Quarter 2 Quarter 3 Quarter 4 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Quarter Quarter 2 Quarter 3 Quarter 4 Time Period (iv) 12 11 10 9 8 7 6 5 Time Series Values Year 1 Year 1 Year Year 2 Year 2 Year 2 Year 2 Year 3, Year Year 3 Year Quarter 1 Quarter 2 Quarter 3 Quarter 4 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Time Period Select your answer What type of pattern exists in the data? Select your answer (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 1, 0 otherwise; Qtr2 = 1 if Quarter 2, 0 otherwise; Qtr3 = 1 if Quarter 3, 0 otherwise. If required, round your answers to three decimal places. For subtractive or negative numbers use a minus sign even if there is a + sign before the blank. (Example: -300) If the constant is "1" it must be entered in the box. Do not round intermediate calculation. Qtri + Qtr2 + Otr3 (c) Compute the quarterly forecasts for next year based on the model you developed in part (b). If required, round your answers to three decimal places. Do not round intermediate calculation. Year Quarter Ft 4 1 4 2 4 3 4 4 (d) Use a multiple regression model to develop an equation to account for trend and seasonal effects in the data. Use the dummy variables you developed in part (b) to capture seasonal effects and create a variable t such that t = 1 for Quarter 1 in Year 1, t = 2 for Quarter 2 in Year 1.... t = 12 for Quarter 4 in Year 3. If required, round your answers to three decimal places. For subtractive or negative numbers use a minus sign even if there is a + sign before the blank. (Example: -300) Qtri + Qtr2 + Qtrs + (e) Compute the quarterly forecasts for next year based on the model you developed in part (d). Do not round your interim computations and round your final answer to three decimal places. Year Quarter Period Ft 4 1 13 4 2 14 4 3 15 4 4 16 (f) Is the model you developed in part (b) or the model you developed in part (d) more effective? If required, round your intermediate calculations and final answer to three decimal places. Model developed in part (b) Model developed in part (d) MSE - Select your answer - Justify your answer. The input in the box below will not be graded, but may be reviewed and considered by your instructor.
