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

question 77

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 2008 to 2010. The following is the resulting regression equation:
ln Ŷ = 3.37 + 0.117 X - 0.083 Q₁ + 1.28 Q₂ + 0.617 Q₃
where Ŷ is the estimated number of contracts in a quarter
X is the coded quarterly value with X = 0 in the first quarter of 2008.
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, to obtain a forecast for the first quarter of 2011 using the model, which of the following sets of values should be used in the regression equation?

• A) X = 12, Q₁ = 0, Q₂ = 0, Q₃ = 0
• B) X = 12, Q₁ = 1, Q₂ = 0, Q₃ = 0
• C) X = 13, Q₁ = 0, Q₂ = 0, Q₃ = 0
• D) X = 13, Q₁ = 1, Q₂ = 0, Q₃ = 0

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