Savings-Mart (a chain of discount department stores) sells patio and lawn furniture. Sales are seasonal, with higher sales during the spring and summer quarters and lower sales during the fall and winter quarters. The company developed the following quarterly sales forecasting model:

Yˆt=7.50+1.100t−2.75D1t+0.25D2t+3.5D3t

where

Yˆt

=

predicted sales (in millions of dollars) in quarter t

7.50

=

quarterly sales (in millions of dollars) when t = 0

t

= 

time period (quarter) where the fourth quarter of 2012 = 0, first quarter of 2013 = 1, second quarter of 2013 = 2, etc.

D1t

= 

1 for first-quarter observations; 0 otherwise

D2t

= 

1 for second-quarter observations; 0 otherwise

D3t

= 

1 for third-quarter observations; 0 otherwise

Forecast Savings-Mart's sales of patio and lawn furniture for each quarter of 2020.

Quarter	Sales Forecast
	(Millions of dollars)
2020 First Quarter	39.15/35.90/36.65
2020 Second Quarter	40.75/45.10/43.25
2020 Third Quarter	45.10/40.25/39.20
2020 Fourth Quarter	42.70/42.45/38.10

Answer rating: 100% (QA)

The estimated equation is Yt7501100t275D1t025D2t35D3t a 2020 First Quarter In 2020 First Quarter t 2... View the full answer