# Quarterly sales for a department store over a six-year period are given in Table (file Sales.xls). 1 answer below »

Quarterly sales for a department store over a six-year period are given in Table (file Sales.xls).

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Quarterly sales for a department store over a six-year period are given in Table (file Sales.xls). 1 answer below »
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 Sales Year Quarter (millions) 1984 1 \$50,147 1984 2 \$49,325 1984 3 \$57,048 1984 4 \$76,781 1985 1 \$48,617 1985 2 \$50,898 1985 3 \$58,517 1985 4 \$77,691 1986 1 \$50,862 1986 2 \$53,028 1986 3 \$58,849 1986 4 \$79,660 1987 1 \$51,640 1987 2 \$54,119 1987 3 \$65,681 1987 4 \$85,175 1988 1 \$56,405 1988 2 \$60,031 1988 3 \$71,486 1988 4 \$92,183 1989 1 \$60,800 1989 2 \$64,900 1989 3 \$76,997 1989 4 \$103,337

a Use multiple regression to develop a model that can be used to predict future quarterly sales. (Hint: Use dummy variables and an independent variable for the number of the quarter (quarter 1, quarter 2, . . . , quarter 24).

b Letting Yt = sales during quarter number t, discuss how to fit the following model to the data in Table :

where x2 = 1 if t is a first quarter, x3 = 1 if t is a second quarter, and x4 = 1 if t is a fourth quarter. (Hint: Take logarithms of both sides.)

c Interpret the answer to part (b).

d Which model appears to yield better predictions for sales?