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Consider the Following Set of Quarterly Sales Data Given in Thousands

Question 107

Essay

Consider the following set of quarterly sales data given in thousands of dollars.The following dummy variable model that incorporates a linear trend and constant seasonal variation was used: yt = β0+ β1t + βQ1(Q1)+ βQ2(Q2)+ βQ3(Q3)+ εt
In this model there are 3 binary seasonal variables (Q1,Q2,and Q3).
Where
Qi is a binary (0,1)variable defined as:
Qi = 1,if the time series data is associated with quarter i;
Qi = 0,if the time series data is not associated with quarter i.
The results associated with this data and model are given in the following computer output.
The prediction equation is
Sales = 2442 + 6.2 Time - 693 Q1 - 1499 Q2 + 153 Q3  Predictor  Coef  StDev  T  P  Constant 2441.7151.916.080.000 Time 6.2514.700.430.684 Q1 692.9142.84.850.002 Q2 1499.2139.010.790.000 Q3 152.9136.61.120.300\begin{array} { l c c c c } \text { Predictor } & \text { Coef } & \text { StDev } & \text { T } & \text { P } \\ \text { Constant } & 2441.7 & 151.9 & 16.08 & 0.000 \\\text { Time } & 6.25 & 14.70 & 0.43 & 0.684 \\\text { Q1 } & -692.9 & 142.8 & -4.85 & 0.002 \\\text { Q2 } & -1499.2 & 139.0 & -10.79 & 0.000 \\\text { Q3 } & 152.9 & 136.6 & 1.12 & 0.300 \end{array}
S=166.4RSq=96.4%RSq(adj)=94.4%\mathrm { S } = 166.4 \quad \mathrm { R } - \mathrm { Sq } = 96.4 \% \quad \mathrm { R } - \mathrm { Sq } ( \mathrm { adj } ) = 94.4 \%
Analysis of Variance
 Source  DF  SS  MS  F  P  Regression 45209942130248547.060.000 Residual Error 719373327676 Total 115403675\begin{array} { l r r r c c } \text { Source } & \text { DF } & \text { SS } & \text { MS } & \text { F } & \text { P } \\ \text { Regression } & 4 & 5209942 & 1302485 & 47.06 & 0.000 \\ \text { Residual Error } & 7 & 193733 & 27676 & & \\ \text { Total } & 11 & 5403675 & & & \end{array}
-Provide a managerial interpretation of the regression coefficient for the variable "time."

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