# Question

A toy company has assigned you to analyze the factors influencing the sales of its most popular doll. The number of these dolls sold during the last 23 years is given in the file P11_57.xlsx. The following factors are thought to influence sales of these dolls:

• Was there a recession?

• Were the dolls on sale at Christmas?

• Was there an upward trend over time?

a. Determine an equation that can be used to predict annual sales of these dolls. Make sure that all variables in your equation are significant at the 10% level.

b. Interpret the coefficients in your equation.

c. Are there any outliers?

d. Is heteroscedasticity or autocorrelation of residuals a problem?

e. During the current year (year 24), a recession is predicted and the dolls will be put on sale at Christmas. There is a 1% chance that sales of the dolls will exceed what value? You can assume here that heteroscedasticity and autocorrelation are not a problem.

• Was there a recession?

• Were the dolls on sale at Christmas?

• Was there an upward trend over time?

a. Determine an equation that can be used to predict annual sales of these dolls. Make sure that all variables in your equation are significant at the 10% level.

b. Interpret the coefficients in your equation.

c. Are there any outliers?

d. Is heteroscedasticity or autocorrelation of residuals a problem?

e. During the current year (year 24), a recession is predicted and the dolls will be put on sale at Christmas. There is a 1% chance that sales of the dolls will exceed what value? You can assume here that heteroscedasticity and autocorrelation are not a problem.

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