TABLE 16-13 A local store developed a multiplicative time-series model to forecast its revenues in future quarters, using quarterly data on its revenues during the 4-year period from 1998 to 2002. The following is the resulting regression equation: log 1 0 Y ^ = 6.102 + 0.012 X - 0.129 Q 1 - 0.054 Q 2 + 0.098 Q 3 where Y ^ is the estimated number of contracts in a quarter X is the coded quarterly value with X = 0 in the first quarter of 1998. Q 1 is a dummy variable equal to 1 in the first quarter of a year and 0 otherwise. Q 2 is a dummy variable equal to 1 in the second quarter of a year and 0 otherwise. Q 3 is a dummy variable equal to 1 in the third quarter of a year and 0 otherwise. -Referring to Table 16-13, the best interpretation of the coefficient of Q₃(0.098) in the regression equation is A) the revenues in the third quarter of a year is approximately 25.31% higher than it would be during the fourth quarter. B) the revenues in the third quarter of a year is approximately 9.8% higher than the average over all 4 quarters. C) the revenues in the third quarter of a year is approximately 25.31% higher than the average over all 4 quarters. D) the revenues in the third quarter of a year is approximately 9.8% higher than it would be during the fourth quarter.

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The Answer of TABLE 16-13 A local store developed a multiplicative time-series model to forecast its revenues in future quarters, using quarterly data on its revenues during the 4-year period from 1998 to 2002. The following is the resulting regression equation: log 1 0 Y ^ = 6.102 + 0.012 X - 0.129 Q 1 - 0.054 Q 2 + 0.098 Q 3 where Y ^ is the estimated number of contracts in a quarter X is the coded quarterly value with X = 0 in the first quarter of 1998. Q 1 is a dummy variable equal to 1 in the first quarter of a year and 0 otherwise. Q 2 is a dummy variable equal to 1 in the second quarter of a year and 0 otherwise. Q 3 is a dummy variable equal to 1 in the third quarter of a year and 0 otherwise. -Referring to Table 16-13, the best interpretation of the coefficient of Q₃(0.098) in the regression equation is A) the revenues in the third quarter of a year is approximately 25.31% higher than it would be during the fourth quarter. B) the revenues in the third quarter of a year is approximately 9.8% higher than the average over all 4 quarters. C) the revenues in the third quarter of a year is approximately 25.31% higher than the average over all 4 quarters. D) the revenues in the third quarter of a year is approximately 9.8% higher than it would be during the fourth quarter.

TABLE 16-13 A Local Store Developed a Multiplicative Time-Series Model to Forecast