Consider the following time series data representing quarterly sales of dishwashers at Big Boys Appliances over the past two years:

The scatter plot of the data above shows seasonality with trend. Hence, a multiple regression model is run to forecast the demand. We denote sales (Y) as the depend variable, and denote time (t, with t = 1 represent the first quarter of 2010) and dummy variables (S2, S3, and S4) as independent variables. Here, we choose quarter 1 as the baseline and adopt three seasonality dummy variables, such that S2 = 1 represents quarter 2, S3 = 1 represents quarter 3, and S4 = 1 represents quarter 4. Answer the following questions. Use α = 0.05.
a. Use the above variable definition to code the data above.
b. Copy the data into Excel and run the corresponding multiple regression. Write the estimated multiple regression equation use the variables defined above.
c. Which variables in the current regression model are significant? And which are not significant? Justify your answer withp-values.

  • CreatedAugust 05, 2013
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