Electric power consumption is measured in kilowatt-hours (kWh). the local utility company offers an interrupt program whereby commercial customers that participate receive favorable rates but must agree to cut back consumption if the utility requests them to do so. Timko products has agreed to cut back consumption from noon to 8:00 p.m. on Thursday. to determine Timko's savings, the utility must estimate Timko's normal power usage for this period of time. data on Timko's electric power consumption for the previous 72 hours are shown below.

a. construct a time series plot. What type of pattern exists in the data?
b. Use the following dummy variables to develop an estimated regression equation to account for any seasonal effects in the data.
time1 = 1 for time period 12-4 a.m.; 0 otherwise
time2 = 1 for time period 4-8 A.M; 0 otherwise
time3 = 1 for time period 8-12 noon; 0 otherwise
time4 = 1 for time period 12-4 P.M; 0 otherwise
time5 = 1 for time period 4-8 P.M; 0 otherwise
c. Use the estimated regression equation developed in part (b) to estimate Timko's normal usage over the period of interrupted service.
d. let period = 1 to refer to the observation for Monday in the time period 12-4 p.m.; period = 2 to refer to the observation for Monday in the time period 4-8 P.M; . . . and period = 18 to refer to the observation for Thursday in the time period 8-12 noon. Using the dummy variables defined in part (b) and period, develop an estimated regression equation to account for seasonal effects and any linear trend in the time series.
e. Using the estimated regression equation developed in part (d), estimate Timko's normal usage over the period of interrupted service.

Transcribed Image Text:

Monday Wednesday Thursday Tuesday 19,281 99,516 Time Period 31,209 37,014 119,968 156,033 128,889 73,923 27,330 32,715 152,465 12-4 A.M 4-8 A.M 8-12 noorn 12-4 P.M 4-8 P.M 8-12 midnight 124,299 113,545 41,300 3 123,666