A Time Series Regression Equation Measuring the Number of Surfboards

question 49

Multiple Choice

A time series regression equation measuring the number of surfboards sold by a surfboard manufacturing company in Australia is given below:
Y = 35 + 4Q₁ + 0.5Q₃ + 8Q₄ + 3t
With t in quarters and the origin is December 2010 and Q₁ is the indicator variable for March, Q₃ is the indicator variable for September and Q₄ is the indicator variable for December.
Which of the following statements is correct regarding the trend component?

• A)There were 43 surfboards sold in December 2010, and this increases by 3 surfboards per quarter, irrespective of the season of the year.
• B)There were 35 surfboard sold in December 2010, and this increases by 15.5 surfboards per quarter, irrespective of the season of the year.
• C)There were 35 surfboard sold in December 2010, and this increases by 3 surfboards per quarter, irrespective of the season of the year.
• D)None of these choices are correct.

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Definitions:

Selling Process

A series of steps taken by a salesperson to lead a potential customer towards purchasing a product or service.

Value Analysis

A methodical approach to assessing a product or service to reduce costs without impairing quality or performance, aiming to improve value for the manufacturer and customer.

Customer Benefit Plan

A strategy designed by businesses to outline and communicate the advantages or value a customer will receive from their product or service.

Smart

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