Question

In: Math

Run a multiple regression with trend and seasonal; forecast the next 12 months.    year Month...

Run a multiple regression with trend and seasonal; forecast the next 12 months.   

year Month Crates
1999 Jan 20400
Feb 13600
Mar 17000
Apr 30600
May 23800
Jun 17000
Jul 27200
Aug 30600
Sep 34000
Oct 45900
Nov 40800
Dec 30600
2000 Jan 13600
Feb 23800
Mar 30600
Apr 25500
May 27200
Jun 30600
Jul 23800
Aug 47600
Sep 37400
Oct 45900
Nov 44200
Dec 17000
2001 Jan 20400
Feb 13600
Mar 30600
Apr 22100
May 23800
Jun 30600
Jul 28900
Aug 34000
Sep 42500
Oct 47600
Nov 30600
Dec 30600
2002 Jan 25500
Feb 20400
Mar 23800
Apr 30600
May 25500
Jun 30600
Jul 34000
Aug 37400
Sep 44200
Oct 47600
Nov 34000
Dec 37400
2003 Jan 25500
Feb 37400
Mar 30600
Apr 30600
May 27200
Jun 34000
Jul 47600
Aug 47600
Sep 34000
Oct 51000
Nov 37400
Dec 47600

Solutions

Expert Solution

ANSWER:

Let me first give you the description of each of the dummy variable.

Dummy_Jan= Binary if month is Jan
Dummy_Feb= Binary if month is Feb
Dummy_Mar= Binary if month is Mar
Dummy_Apr= Binary if month is Apr
Dummy_May= Binary if month is May
Dummy_Jun= Binary if month is Jun
Dummy_Jul= Binary if month is Jul
Dummy_Aug= Binary if month is Aug
Dummy_Sep= Binary if month is Sep
Dummy_Oct= Binary if month is Oct
Dummy_Nov= Binary if month is Nov
Dummy_Dec= Binary if month is Dec

Now, after putting the variables in the regression, we get the model as above:

Crates = 32460-11560*Dummy_Jan-10880*Dummy_Feb-6120.00000000001*Dummy_Mar-4759.99999999999*Dummy_Apr-7139.99999999999*Dummy_May-4080*Dummy_Jun-339.999999999997*Dummy_Jul+6800.00000000001*Dummy_Aug+5780*Dummy_Sep+14960*Dummy_Oct+4760.00000000001*Dummy_Nov

Value of F-Statistic = 6.9 an significance = 0.0000008 << 0.05, so at 5% level of significance the model is important.

The R-adj = 52.38% and R-sq = 61.26%, which implies around 62% of the total variability of the dependent variable is explained by the model.


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