TABLE 16-14 a Contractor Developed a Multiplicative Time-Series Model to Forecast the Forecast

question 64

Multiple Choice

TABLE 16-14
A contractor developed a multiplicative time-series model to forecast the number of contracts in future quarters,using quarterly data on number of contracts during the 3-year period from 2010 to 2012.The following is the resulting regression equation:
ln = 3.37 + 0.117 X - 0.083 Q₁ + 1.28 Q₂ + 0.617 Q₃
where is the estimated number of contracts in a quarter
X is the coded quarterly value with X = 0 in the first quarter of 2010
Q₁ is a dummy variable equal to 1 in the first quarter of a year and 0 otherwise
Q₂ is a dummy variable equal to 1 in the second quarter of a year and 0 otherwise
Q₃ is a dummy variable equal to 1 in the third quarter of a year and 0 otherwise
-Referring to Table 16-14,using the regression equation,which of the following values is the best forecast for the number of contracts in the third quarter of 2013?

• A)49,091
• B)133,352
• C)421,697
• D)1,482,518

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Definitions:

Elastic

A characteristic of demand or supply where the quantity demanded or supplied responds significantly to price changes.

Imperfect Competition

A market structure characterized by a few sellers or buyers, creating an environment where the entities do not have to accept the market price and can influence it instead.

Inefficiency

The situation where resources are not used in the best possible way or when an economy or process could achieve more output without changing input levels.

Linking Pins

Roles or individuals that connect different groups or levels within an organization, facilitating communication and coordination.