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Forecast the stores total sales in Quarter 1 of 2009

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A retail jewelry store has generated the following regression model for forecasting its total quarterly sales (in thousands of dollars):
Yt = 89.1 + 4.46t - 35.64Q1 - 17.82Q2 + 8.91Q3

Where Q1, Q2, and Q3 are indicator variables of the form

Qi = 1 if the data are associated with quarter i
0 otherwise

This model is developed using a data set that starts in Quarter 1 of 2003 (i.e., the first time period t =1 is associated with Quarter 1 of 2003). Use this model to forecast the store's total sales (in thousands of dollars) in Quarter 1 of 2009.

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Solution Summary

The solution shows how to forecast the stores total sales in Quarter 1 of 2009 involving indicator variables.

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Please see the attached file for detailed solution.

For Quarter 1 of 2009,
Now we need to figure out t.
t = 1 for Quarter 1 of ...

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