Question

In: Advanced Math

South Shore Construction builds permanent docks and seawalls along the southern shore of Long Island. Although...

South Shore Construction builds permanent docks and seawalls along the southern shore of Long Island. Although the firm has been in business only five years, revenue has increased from $308,000 in the first year of operation to $1,084,000 in the most recent year. The following data show the quarterly sales revenue in thousands of dollars: (Answer 1-3

1.Below is a simple linear regression analysis for this forecasting problem. Is this a valid model to use to forecast quarterly revenue for South Shore? Why or why not? Explain completely.

2.Based on the model in question 1, what is the forecast for Quarter 1 of Year 6?

3.Is there a seasonal trend in this data? Find the appropriate seasonal factor for Quarter 1 of Year 6 and apply it to get a new forecast for revenue in that quarter. Does this provide a better model than the one used in questions 1 and 2? Why or why not? Provide support for your answer (not necessarily numerical data).

SUMMARY OUTPUT

Regression Statistics

Multiple R

0.555256

R Square

0.30831

Adjusted R Square

0.269882

Standard Error

106.0593

Observations

20

ANOVA

df

SS

MS

F

Significance F

Regression

1

90249.64

90250

8.02321

0.0110388

Residual

18

202474.4

11249

Total

19

292724

Coefficients

Standard Error

t Stat

P-value

Lower 95%

Upper 95%

Lower 95.0%

Upper 95.0%

Intercept

37.67895

49.26788

0.7648

0.45431

-65.829032

141.187

-65.829032

141.1869

X Variable 1

11.64962

4.112803

2.8325

0.01104

3.0089449

20.2903

3.00894485

20.2903

Solutions

Expert Solution

Colby Messinger answered 7 months ago
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