SCENARIO 16-15-B
You Are the CEO of a Diary Company

question 101

True/False

SCENARIO 16-15-B
You are the CEO of a diary company. The total milk production (in gallons) from your company
over the past 30 years are presented below and also contained in the Excel file SCENARIO 16-
15-B.XLSX. $$\begin{array} { l r r r r r r r r r r r } \text { Year } & 1986 & 1987 & 1988 & 1989 & 1990 & 1991 & 1992 & 1993 & 1994 & 1995 \\& 1996 & 1997 & 1998 & 1999 & 2000 & 2001 & 2002 & 2003 & 2004 & 2005 \\& 2006 & 2007 & 2008 & 2009 & 2010 & 2011 & 2012 & 2013 & 2014 & 2015 \\\text { Milk } & 150201 & 193718 & 212520 & 214553 & 237507 & 248069 & 241824 & 234627 & 252049 & 252029 \\\text { Prod } & & & & & & & & & \\& 263449 & 260689 & 247900 & 260059 & 268197 & 249477 & 246216 & 265236 & 256364 & 241705 \\& 245932 & 243529 & 241551 & 247697 & 248454 & 241974 & 235823 & 243517 & 238490 & 248606\end{array}$$ You want to predict your company's future total milk production using the linear trend, quadratic
trend, exponential trend, first-order autoregressive, second-order autoregressive and third-order
autoregressive model.
-Referring to Scenario 16-15-B, you can reject the null hypothesis for testing
the appropriateness of the second-order autoregressive model at the 5% level of significance.

---

Definitions:

Interest Income

Income earned from various types of investments like savings accounts, bonds, and loans.

Provisional Income

Income calculation used to determine if a taxpayer's Social Security benefits are taxable.

Filing Status

A category that determines the rate at which an individual is taxed, based on marital status and sometimes other factors.

Economic Benefit

The advantage gained from salary, wages, investments, or any other source that increases an individual's wealth or resources.