The quarterly sales data (number of copies sold) for a college textbook over the past three years follow

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: Qtr1 1 if Quarter 1, 0 otherwise; Qtr2 1 if Quarter 2, 0 otherwise; Qtr3 1 if Quarter 3, 0 otherwise.

c. Compute the quarterly forecasts for next year.

d. Let t 1 to refer to the observation in quarter 1 of year 1; t 2 to refer to the observation in quarter 2 of year 1; . . . and t 12 to refer to the observation in quarter 4 of year 3.

Using the dummy variables defined in part

(b) and t, develop an estimated regression equation to account for seasonal effects and any linear trend in the time series. Based upon the seasonal effects in the data and linear trend, compute the quarterly forecasts for next year.