Consider the following time series:

a. Construct a time series plot. What type of pattern exists in the data? Is there an indication of a seasonal pattern?
b. Use a multiple linear 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.
c. Compute the quarterly forecasts for next year.

Transcribed Image Text:

Quarter Year 1 71 49 58 78 Year 2 68 41 60 81 Year 3 62 51 53 72