Consider the following time series data: Quarter Year 1 Year 2 Year 3
1 4 6 7
2 2 3 6
3 3 5 6
4 5 7 8

Required:
a. Construct a time series plot. What type of pattern exists in the data?
b. Use a multiple regression model with dummy variables as follows to develop an equation to account for seasonal effects in the data. Qtr1 5 1 if quarter 1, 0 otherwise; Qtr2 5 1 if quarter 2, 0 otherwise; Qtr3 5 1 if quarter 3, 0 otherwise.
c. Compute the quarterly forecasts for next year based on the model you developed in part b.
d. Use a multiple regression model to develop an equation to account for trend and seasonal effects in the data. Use the dummy variables you developed in part b to capture seasonal effects and create a variable t such that t 5 1 for quarter 1 in year 1, t 5 2 for quarter 2 in year 1, … t 5 12 for quarter 4 in year 3.