Quarterly revenues in 1000000s for a national restaurant cha

Quarterly revenues (in $1,000,000\'s) for a national restaurant chain for a five-year period were as follows:

Quarter

Year 1

Year 2

Year 3

Year 4

Year 5

1

33

42

54

70

85

2

36

40

53

67

82

3

35

42

54

70

87

4

38

47

62

77

99

a.

Use Regression Analysis to solve for the forecast equation that minimizes the sum of squared error.

b.

Forecast the four quarters of year 6.

Please provide detailed explanation? How do I find Predicted y, error and squared error, etc?

Solution

Solution :

( a )

F_t = 24.475 + 2.23125 Qtr1_t + 2.3125 Qtr2_t + 3.65625 Qtr3_t + 3.34375t

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( b )

Year 6 : Q1 = 96.925, Q2 = 95.725, Q3 = 97.725, Q4 = 104.725