Exhibit 11.11
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 ≤ predicted sales

Question

Exhibit 11.11
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 ≤ predicted sales < 780 
B) 1255 ≤ predicted sales < 1260 
C) 1275 ≤ predicted sales < 1280 
D) 1405 ≤ predicted sales < 1410

Quizplus · Accepted Answer

Using the regression equation, the predicted sales for the first quarter of year 4 can be calculated as:
Predicted Sales = 857 + (-123)*Season 1 + 441*Season 2 + 116*Season 3
= 857 + (-123)*0.715 + 441*0.921 + 116*1.121
= 1275.109
Therefore, the predicted sales range for the first quarter of year 4 is 1275 ≤ predicted sales < 1280. The best choice is C.

Exhibit 11.11 The Following Questions Use the Data Below