[Solved] QMB 5355 IlethaMiller QMB5355-12 week 5-1

Runninghead: Time series analysis 1




Time series analysis


Iletha Miller


QMB 5355

Robert Miner

November 12, 2015

, Time series analysis 2


Time series analysis

26. The quarterly sales data (number of copies sold) for a college textbook over the past

three years follows.

Quarters Years 1Years 2Year 3

1 1690 1800 1850

2 940 900 1100

3 2625 2900 2930

4 2500 2350 2615

a. Construct a time series plot. What type of pattern exists in the data?

b. Use a 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.

c. Compute the quarterly forecasts for next year.

d. Let = 1 to refer to the observation in quarter 1 of year 1; t = 2 to refer to the

observation in quarter 2 of year 1; . . . ; and t =12 to refer to the observation in quarter

4 of year 3. Using the dummy variables defined in part (b) and also using t; develop an

equation to account for seasonal effects and any linear trend in the time series. Based

upon the seasonal effects in the data and linear trend, compute the quarterly forecasts

for next year.