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Regression analysis

A manufacturer of summer clothing has generated the following regression model for forecasting the number of pairs of walking shorts (in hundreds of thousands) that will be sold during the next few quarters:

See attached file for full problem description.

^/Yt=4.4+0.13t-0.44Q1+0.88Q2+1.32Q3

Where Q1, Q2 , Q3 and are indicator variables of the form
Q1= {█(1 if the data are associated with Quarter " " @0 otherwise)┤

This model is developed using a data set that starts in Quarter 2 of 2002 (i.e., the first time period t=1 is associated with Quarter 2 of 2002). Use this model to forecast the number of pairs of walking shorts (in hundreds of thousands) that will be sold in Quarter 4 of 2008.

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Solution Summary

Step by step method for regression analysis is discussed here. Regression coefficients, coefficient of determination, scatter diagram and significance of regression model are explained in the solution.

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