South Shore Construction builds permanent docks and seawallsalong the southern shore of long island, new york. Although thefirm has been in business for only five years, revenue hasincreased from $320,000 in the first year of operation to$1,116,000 in the most recent year. The following data show thequarterly sales revenue in thousands of dollars:
| Quarter | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
| 1 | 23 | 59 | 76 | 92 | 184 |
| 2 | 103 | 158 | 156 | 202 | 290 |
| 3 | 178 | 267 | 327 | 384 | 453 |
| 4 | 16 | 48 | 49 | 82 | 189 |
a. Use Excel Solver to find the coefficients of a multipleregression model with dummy variables as follows to develop anequation to account for seasonal effects in the data. Qtr1 = 1 ifQuarter 1, 0 otherwise; Qtr2 = 1 if Quarter 2, 0 otherwise; Qtr3 =1 if Quarter 3, 0 otherwise. Round your answers to two decimalplaces.
Ft = _ + _Qtr1 + _Qtr2 + _Qtr3
b. Let Period = 1 to refer to the observation in Quarter 1 ofyear 1; Period = 2 to refer to the observation in Quarter 2 of year1; . . . and Period = 20 to refer to the observation in Quarter 4of year 5. Using the dummy variables defined in part (b) andPeriod, develop an equation to account for seasonal effects and anylinear trend in the time series using Excel Solver. Round youranswers to two decimal places. If your answer is negative valueenter minus sign.
Ft = _ + _Qtr1 + _Qtr2 + _Qtr3 + _Period
Based upon the seasonal effects in the data and linear trend,compute estimates of quarterly sales for year 6. Round your answersto one decimal place.
Quarter 1 forecast =
Quarter 2 forecast =
Quarter 3 forecast =
Quarter 4 forecast =
