Question

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

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**

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 9 minutes ago

asked 56 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 2 hours ago

asked 2 hours ago

asked 2 hours ago

asked 2 hours ago

asked 2 hours ago

asked 2 hours ago

asked 2 hours ago