1. DRQ # November 10, 2011 (4pts)
Suppose that liquor sales is estimated using a seasonal model given by:
Liquor Sales = *FALL + 5*SPRING – 2*SUMMER,
where Fall, Spring, and Summer are dummy variables. Winter is the base season.
(0.5pt) (a) Our forecast for liquor sales in the winter is 30.
(0.5pt) (b) Our forecast for liquor sales in the spring is 35.
(2.0pts) (c) Suppose now that the base season is the Summer. What are the coefficient values in the regression,
Liquor Sales = b0 + b1FALL + b2SPRING + b3WINTER + et?
bo=28; b1 =5; b2 =7; b3 =2
2. Suppose the total sales for a local grocery store from Monday to Friday are given as:
Day Monday Tuesday Wednesday Thursday Friday
Amount $90, $95, $98, $100,000 $105,000
(0.5pt) (a) Give the general model representation of a MA(2) process.
(0.5pt) (b) Calculate the MA(2) prediction sales for Thursday. $96,500.