Problem 15-28 (Algorithmic)

South Shore Construction builds permanent docks and seawalls along the southern shore of long island, new york. Although the firm has been in business for only five years, revenue has increased from $328,000 in the first year of operation to $1,104,000 in the most recent year. The following data show the quarterly sales revenue in thousands of dollars:

Quarter	Year 1	Year 2	Year 3	Year 4	Year 5
1	25	37	95	92	181
2	105	136	175	202	287
3	180	245	346	384	450
4	18	26	68	82	186

Choose the correct time series plot.

(i)	Sales ($1000s) Period	(ii)	Sales ($1000s) Period
(iii)	Sales ($1000s) Period	(iv)	Sales ($1000s) Period

Plot (iii) What type of pattern exists in the data? Trend and Seasonal Pattern

Use Excel Solver to find the coefficients of a multiple 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. Round your answers to two decimal places. Ft = + Qtr1 + Qtr2 + Qtr3

Let Period = 1 to refer to the observation in Quarter 1 of year 1; Period = 2 to refer to the observation in Quarter 2 of year 1; . . . and Period = 20 to refer to the observation in Quarter 4 of year 5. Using the dummy variables defined in part (b) and Period, develop an equation to account for seasonal effects and any linear trend in the time series using Excel Solver. Round your answers to two decimal places. If your answer is negative value enter minus sign. Ft = + Qtr1 + Qtr2 + Qtr3 + Period Based upon the seasonal effects in the data and linear trend, compute estimates of quarterly sales for year 6. Round your answers to one decimal place. Quarter 1 forecast = Quarter 2 forecast = Quarter 3 forecast = Quarter 4 forecast =