Question: A marketing manager has developed a regression model to predict quarterly sales of his company's mid - weight microfiber jackets based on price and amount

A marketing manager has developed a regression model to predict quarterly sales of his company's mid-weight microfiber jackets based on price and amount spent on advertising. An intern suggests that he include indicator (dummy) variables for each quarter. Complete parts (a) through (c) below.
a) How would you code the variables? (How many dummy variables do you need? What values would they have?)
A. There should be 1 variable. The values could be 0 for spring, 1 for summer, 2 for fall, and 3 for winter.
B. There should be 1 indicator variable for one season. The season chosen does not matter, but it should have a value of 1 for that season and 0 for the others.
C. There should be 4 variables. The variables could be spring (1 for spring, 0 for others), summer (1 for summer, 0 for others), fall (1 for fall, 0 for others), and winter (1 for winter, 0 for others).
D. There should be 3 variables. The variables could be spring (1 for spring, 0 for others), summer (1 for summer, 0 for others), and fall (1 for fall, 0 for others).
 A marketing manager has developed a regression model to predict quarterly

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!