Economyst please help

posted by .

Rubax, a US manufacturer of athletic shoes, estimates the following linear trend model for shoe sales.
Q1=a+bt+c1D1+c2D2+c3D3

where
Q1=sales of athletic shoes in the t-th quarter
t= 1,2,...,28{1998(I), 1998(II),...2004(IV)}
D1= 1 if t is quarter I (winter); 0 otherwise
D2= 1 if t is quarter II (spring); 0 otherwise
D3= 1 if t is quarter III(summer); 0 otherwise

The regression analysis produces the following results.

Dependent Variable: QT R-Square F-Ratio P-Value of F

Observations: 28 R-Square 0.9651
F-Ratio 159.01 P-Value = 0.0001
Variable Parameter Standard T-Ratio
Intercept 184500 10310 17.90
T 2100 340 6.18
D1 3280 1510 2.17
D2 6250 2220 2.82
D3 7010 1580 4.44

P-Value
0.0001
0.0001
0.0404
0.0098
0.0002

(a) is there sufficient statistical evidence of an upward trend in shoe sales?
(b) Do this data indicate a statistically significant seasonal pattern of sales for Rubax shoes, If so, what is the seasonal pattern exhibited by the data?
(c) Using the estimated forecast equation, forecast sales of Rubax shoes for 2005(III) and 2006 (II).
(d) how might you improve this forecase equation?

a) Look at the parameter and T-ratio for the T variable. The parameter is positive and the T-ratio is significant(as the P-value is .0001) so.....

b) Hummm. The appropriate test for multiple dummy variables, like your equation, is an F-test. Here, one would test whether the parameters for D1 D2 and D3, as a combination, are significantly different from zero. However, since the parameters for each D1,D2,D3 are each significant, then almost certainly, combined they would be different.
As for the seasonal pattern summer is the best quarter, autum is the worst.

c) Plug the appropriate values into the equation and solve....

d) There are a plethora of variables one could use to improve the forecast. How bout price, price of competitors, advertising expenses, advertising by competitors, population of young adults, number of retailers, number of shoe styles produced, etc.

  • Economyst please help -

    This appears to be repost of a set of questions that was presented months ago along with my answers. I stand by all of my answers. Did you have a follow-up question?

  • Economyst please help -

    Yes can you elaborate on question A & C please Economyst?

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. Economics

    Rubax, a US manufacturer of athletic shoes, estimates the following linear trend model for shoe sales. Q1=a+bt+c1D1+c2D2+c3D3 where Q1=sales of athletic shoes in the t-th quarter t= 1,2,...,28{1998(I), 1998(II),...2004(IV)} D1= 1 if …
  2. managerial economics

    rubax, a u.s manufacturer of athletic shoes, estiamtes the following linear trend model for shoe sales Qt=a+bt+c1D1+c2D2+c3D3 where Qt=sales of athletic shoes in the t-th quater t=1,2,...,28[1998(I),1998(II),...,2004(IV)] D1=1 if t …
  3. math

    Kenisha sells athletic shoes part-time at a department store. She can earn either $500 per month plus a 4% commission on her total sales, or $400 per month plus a 5% commission on total sales. Write a system of equations to represent …
  4. Economics

    Rubax, a US manufacturer of athletic shoes, estimates the following linear trend model for shoe sales. Q1=a+bt+c1D1+c2D2+c3D3 where Q1=sales of athletic shoes in the t-th quarter t= 1,2,...,28{1998(I), 1998(II),...2004(IV)} D1= 1 if …
  5. Economics

    Economyst, please help Rubax__ a U.S. manufacturer of athletic shoes, estimates the following linear trend model for shoe sales: Qt= a + bt + c1D1 + c2D2 + c3D3 Where Qt= sales of athletic shoes in the tth quarter t= 1, 2,…., 28[2001(I), …
  6. Economyst please help

    Economyst, please help Rubax__ a U.S. manufacturer of athletic shoes, estimates the following linear trend model for shoe sales: Qt= a + bt + c1D1 + c2D2 + c3D3 Where Qt= sales of athletic shoes in the tth quarter t= 1, 2,…., 28[2001(I), …
  7. 8th grade math

    Kenisha sells athletic shoes part-time at a department store. She can either earn $500 per month plus a 4% commission on her total sales or $400 per month plus a 5% commission on total sales. A)write a system of equations to represent …
  8. Algebra I

    Write a system of equations to solve- Kay sells athletic shoes aat a store. She can either earn $500 per month plus 4% commission on her tial sales, or $400 per month plus a 5% commission on total sales. then B. What is the total price …
  9. Algebra I

    Write a system of equations to solve- Kay sells athletic shoes aat a store. She can either earn $500 per month plus 4% commission on her tial sales, or $400 per month plus a 5% commission on total sales. then B. What is the total price …
  10. Wichita State University

    Runner Inc. a U.S. athletic shoe manufacturer estimates he following linear trend model for shoe sales: Qt = a = bt + c1D1 + c2D2 + c3D3 Where Qt = sales of athletic shoes in the tth quarter t = 1, 2, 3,….,28 [2007(I), 2007(II), …

More Similar Questions