THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:
The table below shows the quarterly sales of a particular kind of vaccine for dogs.The forecaster uses autoregressive models with p = 3 to forecast the sales for future time periods.

-What is the error term that corresponds to the 1^st quarter in year 5?

Question

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:
The table below shows the quarterly sales of a particular kind of vaccine for dogs.The forecaster uses autoregressive models with p = 3 to forecast the sales for future time periods.

-What is the error term that corresponds to the 1^st quarter in year 5?

Quizplus · Accepted Answer

The error term for a particular quarter is calculated as the difference between the actual sales and the forecasted sales for that quarter. The forecasted sales for the 1^st quarter in year 5 using an autoregressive model with p = 3 can be calculated as the average of the sales from the previous three quarters (2Q1, 2Q2, and 2Q3 in year 5). Therefore, the forecasted sales for this quarter would be (9599 + 9444 + 9120)/3 = 9387.67. The actual sales for this quarter are given as 9438, so the error term would be 9438 - 9387.67 = 50.33. The closest option is C, 50.27.