Instruction 14-8
the Manager of a Health Club Has Recorded

question 179

True/False

Instruction 14-8
The manager of a health club has recorded average attendance in newly introduced step classes over the last 15 months: 32.1,39.5,40.3,46.0,65.2,73.1,83.7,106.8,118.0,133.1,163.3,182.8,205.6,249.1,and 263.5.She then used Microsoft Excel to obtain the following partial output for both a first- and second-order autoregressive model.
SUMMARY OUTPUT - 2nd Order Model
Regression Statistics
$\begin{array} { l r } \text { Multiple R } & 0.993 \\ \text { R Square } & 0.987 \\ \text { Adjusted R Square } & 0.985 \\ \text { Standard Error } & 9.276 \\ \text { Observations } & 15 \end{array}$
$\begin{array} { l c r } & \text { Coefficients } \\ & 5.86 & \\ \text { Intercept } & 0.37 & \\ \text { X Variable 1 } & 0.85 & \\ \text { X Variable 2 } & \\ & \\ \text { SUMMARY OUTPUT - 1st Order Model } \\ \text { Regression Statistics } & \\ \text { Multiple R } & 0.993 \\ \text { R Square } & 0.987 \\ \text { Adjusted R Square } & 0.985 \\ \text { Standard Error } & 9.150 \\ \text { Observations } & 15 \end{array}$
Coefficients
Intercept $\quad 5.66$
$X$ Variable $1 \quad 1.10$
-Referring to Instruction 14-8,based on the parsimony principle,the second-order model is the better model for making forecasts.

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Definitions:

Divisionalized Structure

An organizational framework where operations are segregated into semi-autonomous divisions, each focusing on a specific product line or market segment.

Matrix Structure

An organizational design that combines two or more types of structures, typically functional and divisional, to leverage the benefits of both.

Project Teams

Groups of individuals brought together to accomplish a specific project or objective within a limited time frame.

Functional Structure

An organizational design that groups employees based on their functions or areas of expertise within the company.