Question

Exhibit 4. The numbers of copies of a college textbook sold quarterly over the past three years are:

        

Year	Quarter	Sales	t	Qtr2	Qtr3	Qtr4
1	1	1690	1	0	0	0
1	2	940	2	1	0	0
1	3	2625	3	0	1	0
1	4	2400	4	0	0	1
2	1	1760	5	0	0	0
2	2	990	6	1	0	0
2	3	2800	7	0	1	0
2	4	2510	8	0	0	1
3	1	1850	9	0	0	0
3	2	1100	10	1	0	0
3	3	2930	11	0	1	0
3	4	2615	12	0	0	1

Since the time series has trend and seasonal pattern, to forecast the quarterly sales of the textbook, the following regression equation was found:

t = time period (see the table above with the regression data) and Qtr2, Qtr3 and Qtr4 are dummy variables corresponding to Quarters 2, 3, and 4, respectively.

1. Refer to Exhibit 4. The sales forecast for Quarter 1 of the next year is

a.	2012
b.	1840
c.	2098
d.	1973

ANS:D

2.       Refer to Exhibit 4. The sales forecast for Quarter 4 of the next year is

a.	2810
b.	2676
c.	2714
d.	2750

ANS:C

3.        Refer to Exhibit 4. The sales in Quarter 4 of the next year are predicted to be

a.	741 copies higher than in Quarter 1 of the next year
b.	663 copies higher than in Quarter 1 of the next year
c.	303 copies lower than in Quarter 3 of the next year
d.	277 copies lower than in Quarter 3 of the next year

ANS:A

4.       Refer to Exhibit 4. The sales in Quarter 3 of the next year are predicted to be

a.	1749 copies higher than in Quarter 2 of the next year
b.	1775 copies higher than in Quarter 2 of the next year
c.	303 copies higher than in Quarter 2 of the next year
d.	1446 copies higher than in Quarter 2 of the next year

ANS:B

5.       Refer to Exhibit 4. The estimated growth in the textbook sales is

a.	26 copies per quarter
b.	26 copies per year
c.	1635 + 26 = 1661 copies per quarter
d.	1635 + 26 = 1661 copies per year

ANS:A

((Explain the answers))

Answer 1

(1) Refer to Exhibit 4. The sales forecast for Quarter 1 of the next year is

Option-D

(2) Refer to Exhibit 4. The sales forecast for Quarter 4 of the next year is

Option-C

(3)

Refer to Exhibit 4. The sales in Quarter 4 of the next year are predicted to be

=Q4 - Q1

= 2714 - 1973

= 741

Hence, Option- A 741 copies higher than in Quarter 1 of the next year

(4)

Refer to Exhibit 4. The sales in Quarter 3 of the next year are predicted to be   

=Q3 - Q2

= 2991 - 1216

= 1775

Hence, Option- B 1775 copies higher than in Quarter 2 of the next year

(5)

Refer to Exhibit 4. The estimated growth in the textbook sales is

Hence, Option-A   26 copies per quarter