Question

French Broad Chocolates developed the following quarterly sales forecasting​ model: Sales​ = 8.25​ + 0.125 t​...

French Broad Chocolates developed the following quarterly sales forecasting​ model:

Sales​ = 8.25​ + 0.125 t​ - 2.75 D1​ + 1.25 D2​ + 3.5 D3

where t is time period.​ (time is zero in the fourth quarter of​ 2000, time is 1 in the first quarter of 2001 and 2 in the second quarter of 2001​ etc.) and​ D1, D2, and D3 are quarterly dummy variables.

Forecast French Broad​ Chocolate's sales for each quarter of 2010.

Economics

Homework Answers

Answer #1
Year Quarter time = t
2000 4th 0
2001 1st 1
2001 2nd 2
2001 3rd 3
2001 4th 4
2002 1st 5
2002 2nd 6
2002 3rd 7
2002 4th 8
2003 1st 9
2003 2nd 10
2003 3rd 11
2003 4th 12
2004 1st 13
2004 2nd 14
2004 3rd 15
2004 4th 16
2005 1st 17
2005 2nd 18
2005 3rd 19
2005 4th 20
2006 1st 21
2006 2nd 22
2006 3rd 23
2006 4th 24
2007 1st 25
2007 2nd 26
2007 3rd 27
2007 4th 28
2008 1st 29
2008 2nd 30
2008 3rd 31
2008 4th 32
2009 1st 33
2009 2nd 34
2009 3rd 35
2009 4th 36
2010 1st 37
2010 2nd 38
2010 3rd 39
2010 4th 40

D1 =1 when quarter is 1st and D1=0 otherwise.

D2=1 when quarter is 2nd and D2 = 0 otherwise.

D3 = 1 when quarter is 3rd and D3 = 0 otherwise.

D1=D2=D3 =0 when quarter is 4th.

Chocolates sales in 1st quarter of 2010

Put, t= 37, D1 =1, D2=D3=0.

Sales​ = 8.25​ + 0.125 t​ - 2.75 D1​ + 1.25 D2​ + 3.5 D3

Sales = 8.25 + 0.125 (37) - 2.75(1) + 1.25(0) +3.5(0)

Sales = 8.25 + 4.625 - 2.75 + 0 + 0

Sales = 10.125

Chocolates sales in 2nd quarter of 2010

Put, t= 38, D2 =1, D1=D3=0.

Sales​ = 8.25​ + 0.125 t​ - 2.75 D1​ + 1.25 D2​ + 3.5 D3

Sales = 8.25 + 0.125 (38) - 2.75(0) + 1.25(1) +3.5(0)

Sales = 8.25 + 4.75 - 0 + 1.25 +0

Sales = 14.25

Chocolates sales in 3rd quarter of 2010

Put, t= 39, D3 =1, D1=D2=0.

Sales​ = 8.25​ + 0.125 t​ - 2.75 D1​ + 1.25 D2​ + 3.5 D3

Sales = 8.25 + 0.125 (39) - 2.75(0) + 1.25(0) +3.5(1)

Sales = 8.25 + 4.875 - 0 + 0 + 3.5

Sales = 16.625

Chocolates sales in 4th quarter of 2010

Put, t= 40, D1= D2=D3=0.

Sales​ = 8.25​ + 0.125 t​ - 2.75 D1​ + 1.25 D2​ + 3.5 D3

Sales = 8.25 + 0.125 (40) - 2.75(0) + 1.25(0) +3.5(0)

Sales = 8.25 + 5 - 0 + 0 + 0

Sales = 13.25

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions