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

question 132

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, using the regression equation, which of the following values is the best forecast for the number of contracts in the third quarter of 2011?

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

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Definitions:

Price Floor

A government- or authority-imposed minimum price that can be charged for a good or service, intended to prevent the market price from falling below a certain level.

Government

The system or group of people governing an organized community, often a state.

Sellers

Individuals or entities that offer goods or services in exchange for payment.

Price Ceiling

A legally imposed limit on how high a price can be charged for a product, service, or resource.