TABLE 16-5
A contractor developed a multiplicative time-series model to forecast the number of contracts in future quarters, using quarterly data on number of contracts during the 3-year period from 2006 to 2008. The following is the resulting regression equation:

-Referring to Table 16-5, using the regression equation, which of the following values is the best forecast for the number of contracts in the third quarter of 2009?
A) 49091
B) 133352
C) 421697
D) 1482518

Question

TABLE 16-5
A contractor developed a multiplicative time-series model to forecast the number of contracts in future quarters, using quarterly data on number of contracts during the 3-year period from 2006 to 2008. The following is the resulting regression equation:
  
-Referring to Table 16-5, using the regression equation, which of the following values is the best forecast for the number of contracts in the third quarter of 2009?
A) 49091 
B) 133352 
C) 421697 
D) 1482518

Quizplus · Accepted Answer

The regression equation is: Number of Contracts = 49091 x (1.564)^t, where t = 0 for the first quarter of 2006. 
Plugging t=11 (for the third quarter of 2009, which is 11 quarters after the first quarter of 2006) gives:
Number of Contracts = 49091 x (1.564)^11 = 421697. Therefore, the best forecast for the number of contracts in the third quarter of 2009 is 421697, which is option C.

TABLE 16-5 a Contractor Developed a Multiplicative Time-Series Model to Forecast the Forecast