1.Fanfare International, Inc., designs, distributes, and markets ceiling fans and lighting fixtures.The company's product line is distributed by a sales organization of 58 independent sales representatives.In the summer of 1994, Fanfare decided it needed to develop forecasts of future sales to help determine future salesforce needs, capital expenditures, and so on.The Fans data contains monthly sales data and data on three additional variables for the period July, 1990 through May, 1994.The variables are SALES (total monthly sales in $1000), ADEX (advertising expense in $1000), MTGRATE (mortgage rate for 30-year loans in %), and HSSTARTS (housing starts in 1000 of units).Also there are columns for year and month.As a consultant for Fanfare, your job is to find the best single variable to forecast future sales.Try each of the variables in a simple regression and decide which is the best to forecasting model for Fanfare.Justify your choice.What problems do you see with using each of the three possible variables to forecast sales?Discuss how you would improve the model.BUT DO NOT OBTAIN THE MODEL

Year Month Sales AdExp MtgRates HouseStarts

90 7 1538 14 10.04 111.2

90 8 1360 14 10.1 102.8

90 9 1202 68 10.18 93.1

90 10 1243 35 10.18 94.2

90 11 1076 35 10.01 81.4

90 12 691 32 9.67 57.4

91 1 1036 94 9.64 52.5

91 2 891 75 9.37 59.1

91 3 1120 76 9.5 73.8

91 4 1490 73 9.49 99.7

91 5 1672 71 9.47 97.7

91 6 1517 209 9.62 103.4

91 7 1866 95 9.58 103.5

91 8 1588 59 9.24 94.7

91 9 1430 77 9.01 86.6

91 10 1636 94 8.86 101.8

91 11 1225 168 8.71 75.6

91 12 1027 149 8.5 65.6

92 1 1323 100 8.43 71.6

92 2 1257 128 8.76 78.8

92 3 1915 88 8.94 111.6

92 4 1422 124 8.85 107.6

92 5 1697 103 8.67 115.2

92 6 2053 89 8.51 117.8

92 7 1965 156 8.13 106.2

92 8 1855 158 7.98 109.9

92 9 1911 168 7.92 106

92 10 1754 174 8.09 111.8

92 11 1559 321 8.31 84.5

92 12 1333 206 8.22 78.6

93 1 1675 224 8.02 70.5

93 2 1360 183 7.68 74.6

93 3 1667 281 7.5 95.5

93 4 1889 255 7.47 117.8

93 5 1906 318 7.47 120.9

93 6 2246 235 7.42 128.5

93 7 2232 169 7.21 115.3

93 8 2300 250 7.11 121.8

93 9 2097 231 6.92 118.5

93 10 2008 222 6.83 123.2

93 11 1931 184 7.16 102.3

93 12 1720 177 7.17 98.7

94 1 1936 363 7.06 76.2

94 2 1847 268 7.15 83.5

94 3 2399 229 7.68 134.3

94 4 2176 287 8.32 137.6