Quarterly sales for a department store over a six-year period are given in the file S12_62.xlsx.
a. Use multiple regression to develop an equation that can be used to predict future quarterly sales.
b. Letting Yt be the sales during quarter t, discuss how to estimate the following equation for this series.
Yt = abt1b2X1b3X2b4X3
Here X1 is a dummy for first quarters, X2 is a dummy for second quarters, and X3 is a dummy for third quarters.
c. Interpret the results from part b.
d. Which model appears to yield better predictions for sales, the one in part a or the one in part b?