To ensure that as many trial subscriptions to the 3- For- All service as possible are converted to regular subscriptions, the marketing department works closely with the customer support department to accomplish a smooth initial process for the trial subscription customers. To assist in this effort, the marketing department needs to accurately forecast the monthly total of new regular subscriptions.

1. What criticism can you make concerning the method of forecasting that involved taking the new subscriptions data for the prior three months as the basis for future ­projections?

2. What factors other than number of telemarketing hours spent might be useful in predicting the number of new subscriptions? Explain.

3. a. Analyze the data and develop a regression model to predict the number of new subscriptions for a month, based on the number of hours spent on telemarketing for new subscriptions.
b. If you expect to spend 1,200 hours on telemarketing per month, estimate the number of new subscriptions for the month. Indicate the assumptions on which this prediction is based. Do you think these assumptions are valid? Explain.
c. What would be the danger of predicting the number of new subscriptions for a month in which 2,000 hours were spent on telemarketing?