In: Statistics and Probability
The quarterly sales (number of books sold) over the past 3 years are as shown below.
Year |
Quarter |
Period |
Sales |
1 |
1 |
1 |
1700 |
1 |
2 |
2 |
1000 |
1 |
3 |
3 |
2700 |
1 |
4 |
4 |
2500 |
2 |
1 |
5 |
1800 |
2 |
2 |
6 |
900 |
2 |
3 |
7 |
2900 |
2 |
4 |
8 |
2400 |
3 |
1 |
9 |
1800 |
3 |
2 |
10 |
1100 |
3 |
3 |
11 |
2900 |
3 |
4 |
12 |
2600 |
Paste the time series plot
Set up the dummy variables in excel, run the regression model with dummy variables
Paste output of regression model with dummy variables here
Insert the regression output for the model here
a)
Time series plot
The time series plot is obtained in excel by using the columns period and sales. The screenshot is shown below,
b)
There is a seasonal pattern of sales with an upward trend.
c)
Let the dummy variables Qtr1, Qtr2 and Qtr3 and are defined as
The regression analysis is done in excel by following steps
Step 1: Write the data values in excel. The screenshot is shown below,
Step 2: DATA > Data Analysis > Regression > OK. The screenshot is shown below,
Step 3: Select Input Y Range: 'Y' column, Input X Range: 'Qtr1, Qtr2 and Qtr3' column then OK. The screenshot is shown below,
The result is obtained. The screenshot is shown below,
d)
The regression equation is.
e)
The seasonal forecast for year 4 is obtained by putting the value of the independent variables in this formula,
Year | Quarter | Qtr1 | Qtr2 | Qtr3 | Forecast |
4 | 1 | 1 | 0 | 0 | 1766.667 |
2 | 0 | 1 | 0 | 1000 | |
3 | 0 | 0 | 1 | 2833.333 | |
4 | 0 | 0 | 0 | 2500 |
f)
Now adding a trend variable Period, t
The regression analysis is done in excel by following steps
Step 1: Write the data values in excel. The screenshot is shown below,
Step 2: DATA > Data Analysis > Regression > OK.
Step 3: Select Input Y Range: 'Y' column, Input X Range: 'Qtr1, Qtr2, Qtr3 and Period' column then OK. The screenshot is shown below,
The result is obtained. The screenshot is shown below,
g)
h)
The seasonal forecast for year 4 is obtained by putting the value of the independent variables in this formula,
Year | Quarter | Period, t | Qtr1 | Qtr2 | Qtr3 | Forecast |
4 | 1 | 13 | 1 | 0 | 0 | 1891.667 |
2 | 14 | 0 | 1 | 0 | 1125 | |
3 | 15 | 0 | 0 | 1 | 2958.333 | |
4 | 16 | 0 | 0 | 0 | 2625 |