Question

In: Economics

French Bread Chocolates developed the following quarterly sales forecasting model: Sales = 8.50 + 0.150 TIME...

French Bread Chocolates developed the following quarterly sales forecasting model:

Sales = 8.50 + 0.150 TIME - 2.70 Q1 + 1.20 Q2 + 3.5 Q3

where TIME is time period. (time is zero in the fourth quarter of 2009, time is 1 in the first quarter of 2010 and 2 in the second quarter of 2010 etc.) and Q1, Q2, and Q3 are quarterly dummy variables.

Forecast French Broad Chocolate's sales for each quarter of 2022.

Solutions

Expert Solution

Quarter Year Time
4 2009 0
1 2010 1
2 2010 2
3 2010 3
4 2010 4
1 2011 5
2 2011 6
3 2011 7
4 2011 8
1 2012 9
2 2012 10
3 2012 11
4 2012 12
1 2013 13
2 2013 14
3 2013 15
4 2013 16
1 2014 17
2 2014 18
3 2014 19
4 2014 20
1 2015 21
2 2015 22
3 2015 23
4 2015 24
1 2016 25
2 2016 26
3 2016 27
4 2016 28
1 2017 29
2 2017 30
3 2017 31
4 2017 32
1 2018 33
2 2018 34
3 2018 35
4 2018 36
1 2019 37
2 2019 38
3 2019 39
4 2019 40
1 2020 41
2 2020 42
3 2020 43
4 2020 44
1 2021 45
2 2021 46
3 2021 47
4 2021 48
1 2022 49
2 2022 50
3 2022 51
4 2022 52

Q1, Q2 and Q3 are quartely dummy variables.

When quarter is 1st, then Q1 = 1. Q2=Q3=0

When quarter is 2nd, then Q2 =1, Q1 = Q3 =0

When quarter is 3rd, then Q3=1, Q1=Q2 =0

When Quarter is 4th, then Q1=Q2 = Q3 = 0.

French Board Chocolate's sales for 1st quarter of 2022.

Sales = 8.50 + 0.150 TIME - 2.70 Q1 + 1.20 Q2 + 3.5 Q3

put TIME = 49, Q1 = 1, Q2 = Q3 =0

Sales = 8.50 + 0.150(49) - 2.70(1) + 1.20(0) + 3.5(0)

Sales = 8.50 + 7.35 - 2.70 + 0 + 0

Sales = 13.15

French Board Chocolate's sales for 2nd quarter of 2022.

Sales = 8.50 + 0.150 TIME - 2.70 Q1 + 1.20 Q2 + 3.5 Q3

put TIME = 50, Q2 = 1, Q1 = Q3 =0

Sales = 8.50 + 0.150(50) - 2.70(0) + 1.20(1) + 3.5(0)

Sales = 8.50 + 7.5 - 0 + 1.20 + 0

Sales = 17.2

French Board Chocolate's sales for 3rd quarter of 2022.

Sales = 8.50 + 0.150 TIME - 2.70 Q1 + 1.20 Q2 + 3.5 Q3

put TIME = 51, Q3 = 1, Q2 = Q1 =0

Sales = 8.50 + 0.150(51) - 2.70(0) + 1.20(0) + 3.5(1)

Sales = 8.50 + 7.65 - 0 + 0 + 3.5

Sales = 19.65

French Board Chocolate's sales for 4th quarter of 2022.

Sales = 8.50 + 0.150 TIME - 2.70 Q1 + 1.20 Q2 + 3.5 Q3

put TIME = 52, Q1 = Q2 = Q3 =0

Sales = 8.50 + 0.150(52) - 2.70(0) + 1.20(0) + 3.5(0)

Sales = 8.50 + 7.8 - 0 + 0 + 0

Sales = 16.3

Rahul Sunny answered 3 months ago
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