Quarterly sales data (in $10, 000) for a small company specializing in green cle

Question

Quarterly sales data (in $10, 000) for a small company specializing in green cleaning products are shown in the time series graph below. A seasonal regression model was fit to these data and the results are shown below. The regression equation is Sales = 136 - 31.0 Q1 - 52.0 Q2 - 51.2 Q3 S = 11.8121 R-Sq = 79.3% R-Sg (adj) = 76.2% Analysis of Variance Source a) Is the seasonal regression model significant overall? Explain. b) Interpret the regression coefficients in this model. c) Use this model to provide forecasts for each of the four quarters of the next year.

Explanation / Answer

a) Yes , the model is significant

as p-value for F is 0.000 < 0.05

b) Y = 136.167 -31*Q1 -52*Q2 -51.167*Q3

-31 represent that if it is the difference in the seasonal component (Q1) from the Q4 period.

-52 represent that if it is the difference in the seasonal component (Q2) from the Q4 period.

-51.167 represent that if it is the difference in the seasonal component (Q3) from the Q4 period.

c)

Q1 Q2 Q3

1 0 0 105.167 0 1 0 84.167 0 0 1 85 136.167

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