Using the data from the second problem in Section 11.1 for LLW Industries, estimate an autoregressive model. Experiment with different values for p-order models until you have what you think is the most justifiable model. Explain your final model. Compare it with the time series model you estimated in Section 11.1.

Second problem in Section 11.1

Annual measures of output measured in thousands of tons produced for LLW Industries are shown in the accompanying table. If productivity exceeds 19 tons by 2016 the CEO of the firm will give all employees an additional increase in pay of $10,000. Will they receive the bonus?

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Year 2004 2005 2006 2007 2008 2009 2010 2011 2012 Tons 12.3 13.5 13.9 14.5 15.2 15.6 15.1 16.8 17.2