Janet uses a linear quarterly sales forecasting model to forecast quarterly sale

Question

Janet uses a linear quarterly sales forecasting model to forecast quarterly sales at the local garden center. Sales are seasonal with lower sale during the first quarter and higher sales the rest of the quarters. Janet developed the following quarterly sales forecasting model for her garden center.

Forecasting sales = 2800 + 200T - 350D1t + 132D2t + 446D3t

the first quarter of 2006 = 1, and the second quarter = 2, etc...

Using these information and the ultiple regression linear sales forecasting model shown above, what would your sales estimate or forecast be for the first quarter of 2010?

a. 7239

b. 6321

c. 4684

d. 5850

Explanation / Answer

Ans is C

Since from 2006 to 1st quarter 2010 there are 17 quarters

Thus T=17 and D1t=1 and D2t=0 and D3t=0

Sale forcast=2800+200(17)-350(1)+132(0)+446(0)=5850

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