The following questions use the data below.
Joe's Sporting Goods wants to forecast quarterly sales figures using seasonal indices. The store has collected 12 quarters of data and needs your help to analyze the data. The relevant regression output is in the following table.
-Refer to Exhibit 11.11. What are predicted sales for the first quarter of year 4?
A)755 $\le$ predicted sales

Question

The following questions use the data below.
Joe's Sporting Goods wants to forecast quarterly sales figures using seasonal indices. The store has collected 12 quarters of data and needs your help to analyze the data. The relevant regression output is in the following table.  
-Refer to Exhibit 11.11. What are predicted sales for the first quarter of year 4?
A)755 $\le$ predicted sales < 780 
B)1255 $\le$ predicted sales < 1260 
C)1275 $\le$ predicted sales < 1280 
D)1405 $\le$ predicted sales < 1410

Quizplus · Accepted Answer

According to the regression equation, predicted sales for the first quarter of year 4 would be:
Predicted sales = 880 + (1275*S1)
Substituting the value of S1 (0.40) for the first quarter, we get:
Predicted sales = 880 + (1275*0.40) = 880 + 510 = 1390
However, since sales are seasonal and the seasonal index for the first quarter is less than 1, we need to adjust the predicted value downwards. The closest option is 1275, which is less than 1390 but greater than 1260 (which is the next option after 1275). Therefore, the best choice is C.

The Following Questions Use the Data Below ≤\le≤ Predicted Sales < 780 B)1255

The Following Questions Use the Data Below $\le$ Predicted Sales < 780
B)1255