3.

Quarter	Year 1	Seasonal Index	Year 2	Seasonal Index	Average Index	Year 3
Fall	12,000	1.2	13,000	1.238	1.22	13,725
Winter	11,500		11,000
Spring	9,500		9,500
Summer	7,000		8,500
Total	40,000	X	42,000	X	X	45,000
Average	10,000	X	10,500	X	X	11,250

Fill in the above chart on seasonal averaging.

4. Here is the sales and profit data for a sporting goods company with 12 stores. Use the data to answer the regression problem #4.

Sales in $ millions	Profits in $ millions
7	.15
2	.10
6	.13
4	.15
14	.25
15	.27
16	.24
12	.20
14	.27
20	.44
15	.34
7	.17

1. What is the r value?
2. Do you consider the correlation strong?
3. What is the expected profit when sales are $10 million?