Using the time series shown in Problem 16.25, answer the following questions: a. Forecast the demand for

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Using the time series shown in Problem 16.25, answer the following questions:

a. Forecast the demand for each quarter in Year 4 using seasonal dummy variables and a best subsets regression.

b. Interpret the meaning of the coefficients for the seasonal dummy variables.

c. Calculate the MAD for this forecast.

Problem 16.25

Consider the following time series:

a) Forecast the demand for each quarter in Year 4 using multiplicative decomposition.

b) Interpret the meaning of the seasonal components.

c) Calculate the MAD for this forecast.

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Business Statistics

ISBN: 9780321925121

2nd Edition

Authors: Robert A. Donnelly

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Question Posted: Jul 29, 2015 03:31 AM

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Using the time series shown in Problem 16.25, answer the following questions: a. Forecast the demand for

Question:

Year 1 Year 2 Year 3 Quarter Demand Quarter Demand Quarter Demand 28 31 1 27 2 18 2 18 15 25 3 22 3 20 4 14 4 4

Step by Step Answer:

a Dummy Variables S1 S2 S3 Quarter 1 0 0 0 Quarter 2 1 0 0 Quarter 3 0 1 0 Quarter 4 0 0 1 Set x1 Pe...View the full answer

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