TABLE 16-12 A Local Store Developed a Multiplicative Time-Series Model to Forecast

question 95

Multiple Choice

TABLE 16-12
A local store developed a multiplicative time-series model to forecast its revenues in future quarters, using quarterly data on its revenues during the 4-year period from 2005 to 2009. The following is the resulting regression equation:
log₁₀ = 6.102 + 0.012 X - 0.129 Q₁ - 0.054 Q₂ + 0.098 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 2005.
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 16-12, to obtain a forecast for the third quarter of 2010 using the model, which of the following sets of values should be used in the regression equation?

• A) X = 22, Q₁ = 0, Q₂ = 0, Q₃ = 0
• B) X = 22, Q₁ = 0, Q₂ = 0, Q₃ = 1
• C) X = 23, Q₁ = 0, Q₂ = 0, Q₃ = 0
• D) X = 23, Q₁ = 0, Q₂ = 0, Q₃ = 1

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Definitions:

Propensity Score Matching

A method of pairing individuals for assignment to a treatment and control condition based upon a combination of scores on participant variables.

Multiple Variables

Multiple variables refer to the presence or use of more than one variable in an experiment or analysis to understand complex relationships or effects.

Random Assignment

A method used in experiments to allocate subjects randomly to experimental and control groups, ensuring each participant has an equal chance of any condition.

Technique

A systematic procedure, method, or skill applied in a particular task to achieve a desired result efficiently.