[ Statistics for Business and Economics]

Assignment – 1
1. Listed below is the net sales in $ million for home Depot, Inc. and its subsidiaries from 1997
to 2006.
Table 1: Net sales of different years

Year Net Sales ($) Year Net Sales ($)

1997 50,600 2002 156,700

1998 67,300 2003 201,400

1999 80,800 2004 227,300

2000 98,100 2005 256,300

2001 124,400 2006 280,900

i) Determine the least square equation. On the basis of this information, what are the
estimated sales for 2010?
ii) Plot Net Sales and Trend Line

Assignment – 1 Solution
Net sales and coded year from 1997-2006:

Year Code(t) Net Sales ($)

1997 1 50,600
1998 2 67,300
1999 3 80,800
2000 4 98,100
2001 5 124,400
2002 6 156,700
2003 7 201,400
2004 8 227,300
2005 9 256,300
2006 10 280,900

Interpretation :
The least square equation of the net sales in $ million for home Depot, Inc and its
subsidiaries from 1997 to 2006 is Y = 27093x + 5366.
Now,
1. 5366 is the point where trend line intersects the y axis. So, 5366 point is the y
intersects.
2. If, the time is increased by one year, sales will be increased by an amount of 27093
Here, t=14
Y= 27093*14 + 5366=384668
So, the sales for 2010 would be $ 384668.

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 [ Statistics for Business and Economics]

Determined least square equation

Net Sales ($)

300,000 y = 27093x + 5366.7

250,000

200,000

150,000 Net Sales ($)

Linear (Net Sales ($))
100,000

50,000

0
0 5 10 15

Interpretation :
From the graph, we can see that sales are gradually increasing. Here, blue dot is the
original data. So, this graph shows a trend line equation where sales are gradually
increasing.

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 [ Statistics for Business and Economics]

Assignment – 2
It appears that the imports of carbon black have been increasing by about 10 percent
annually.
Table 2: Amount of Carbon Block imported in different years

Year Imports of Carbon Year Imports of Carbon

Block (thousands Block (thousands
of tons) of tons)
1990 124 1997 2463
1991 175 1998 3358
1992 306 1999 4181
1993 524 2000 5388
1994 714 2001 8027
1995 1052 2002 10587
1996 1638 2003 13537

i) Determine the logarithmic trend.

ii) Find the annual rate of increase.
iii) Estimate imports for the year 2006.

Assignment – 2 Solution
Log of carbon block with coded year:

Imports of Log of imports

Carbon Block
Year Code(t) of carbon
(thousands of
block(x)
tons)

1990 124 1 2.093421685

1991 175 2 2.243038049
1992 306 3 2.485721426
1993 524 4 2.719331287
1994 714 5 2.853698212
1995 1052 6 3.02201574
1996 1638 7 3.214313897
1997 2463 8 3.391464412
1998 3358 9 3.526080692
1999 4181 10 3.621280168
2000 5388 11 3.731427587
2001 8027 12 3.904553263
2002 10587 13 4.024772913
2003 13537 14 4.131522429

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 [ Statistics for Business and Economics]

Interpretation :
Here
Log a= 2.033 Log b= 0.157
Log Y’= 0.157x + 2.033
b= Antilog 0.157= 1.435489
Sales increases annually by = b -1
= 1.435489 -1 = 0.435489 or 43.5489%
So, sales is increased by 43.5489% annually(ans-2)
Here, t=17
Log Y’= 0.157(17) + 2.033 = 4.702
Y’= antilog 4.702= 50350.06
So, estimated sales for the 2006 would be 50350.06 (thousand).(ans-3)

Determined logarithm trend

Log of imports of carbon block(x)

4.5
y = 0.1571x + 2.0334
4
3.5
3
Log of imports of
2.5
carbon block(x)
2
Linear (Log of imports
1.5 of carbon block(x))
1
0.5
0
0 5 10 15

Interpretation :
The Logarithmic Trend Equation: Log y = 0.157x + 2.033

2.033 is the point through which the logarithmic trend line crosses the Y- axis. If time
is increased by 1 year the imports of Carbon block will be increased by an amount of
0.157 tons (in thousands).

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 [ Statistics for Business and Economics]

Assignment – 3
2. The quarterly production of pine lumber, in millions of board feet, by Northwest lumber
since 1998 is :

Table 3: Productions in different quarters of several years

Year Quarter Production Year Quarter Production Year Quarter Production
1998 Winter 90 2001 Winter 201 2004 Winter 265
Spring 85 Spring 142 Spring 185
Summer 56 Summer 110 Summer 142
Fall 102 Fall 274 Fall 333
1999 Winter 115 2002 Winter 251 2005 Winter 282
Spring 89 Spring 165 Spring 175
Summer 61 Summer 125 Summer 157
Fall 110 Fall 305 Fall 350
2000 Winter 165 2003 Winter 241 2006 Winter 290
Spring 110 Spring 158 Spring 201
Summer 98 Summer 132 Summer 187
Fall 248 Fall 299 Fall 400

i) Develop a seasonal index for each quarter and interpret.

ii) Project the production for 2007 and also find the base line production.
iii) Plot the original data and Deseasonalize data and interpret.

Assignment – 3 Solution
seasonal index for each quarter:

4
years
4 Central Specific Typical Deseasonal
Produ movin
Year Quarter years moving seasona Season code(t) ized
ction g
total average l index al index Production
Avera
ge
1998 Winter 90 1.22942 1 73.20525126

Spring 85 0.80637 2 105.4106676

333 83.25
Summer 56 0.64833 0.62025
86.375 5745 6 3 90.28530155
358 89.5
Fall 102 1.13333 1.34396
90 3333 2 4 75.89500298
362 90.5

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 [ Statistics for Business and Economics]

Winter 115 1.26200

1999 91.125 2743 1.22942 5 93.54004327
367 91.75
Spring 89 0.95956
92.75 8 0.80637 6 110.3711696
375 93.75
Summer 61 100 0.61 0.62025 7 98.34648919
425 106.25
Fall 110 1.01033 1.34396
108.875 2951 2 8 81.84755224
446 111.5
Winter 165 1.42088
2000 116.125 267 1.22942 9 134.2096273
483 120.75
Spring 110 0.79710
138 1449 0.80637 10 136.4138051
621 155.25
Summer 98 0.61345 0.62025
159.75 8529 6 11 157.9992777
657 164.25
Fall 248 1.47399 1.34396
168.25 7028 2 12 184.5290269
689 172.25
Winter 201 1.15683
2001 173.75 4532 1.22942 13 163.4917278
701 175.25
Spring 142 0.79551
178.5 8207 0.80637 14 176.0978211
727 181.75
Summer 110 0.58510 0.62025
188 6383 6 15 177.3461281
777 194.25
Fall 274 1.38998 1.34396
197.125 0977 2 16 203.8748119
800 200
Winter 251 1.24334
2002 201.875 3653 1.22942 17 204.1613118
815 203.75
Spring 165 0.79470
207.625 1987 0.80637 18 204.6207076
846 211.5
Summer 125 0.59453 0.62025
210.25 0321 6 19 201.529691
836 209
Fall 305 1.46546 1.34396
208.125 5465 2 20 226.9409403

829 207.25

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 [ Statistics for Business and Economics]

Winter 241 1.15795

2003 208.125 7958 1.22942 21 196.027395
836 209
Spring 158 0.75870
208.25 3481 0.80637 22 195.9398291
830 207.5
Summer 132 0.62707 0.62025
210.5 8385 6 23 212.8153537
854 213.5
Fall 299 1.37867
216.875 4 1.34396 24 222.4765284
881 220.25
Winter 265 1.19638
2004 221.5 8262 1.22942 25 215.5487954
891 222.75
Spring 185 0.81497
227 7974 0.80637 26 229.4232176
925 231.25
Summer 142 0.60846 0.62025
233.375 2775 6 27 228.9377289
942 235.5
Fall 333 1.42155 1.34396
234.25 8164 2 28 247.7748627
932 233
Winter 282 1.20063
2005 234.875 8638 1.22942 29 229.3764539
947 236.75
Spring 175 0.73260
238.875 0733 0.80637 30 217.0219626
964 241
Summer 157 0.64876 0.62025
242 0331 6 31 253.1212919
972 243
Fall 350 1.42131 1.34396
246.25 9797 2 32 260.4240298
998 249.5
Winter 290 1.14511
2006 253.25 3524 1.22942 33 235.8835874
1028 257
Spring 201 0.76353
263.25 2764 0.80637 34 249.2652256
1078 269.5
Summer 187 0.62025
6 35 301.4884177

Fall 400 1.34396

2 36 297.6274627

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 [ Statistics for Business and Economics]

Seasonal Index of sales from 1998-2006:

Year winter spring summer Fall Column1

1998 0.648335745 1.133333333
1999 1.262003 0.9595687 0.61 1.010332951
2000 1.420883 0.7971014 0.613458529 1.473997028
2001 1.156835 0.7955182 0.585106383 1.389980977
2002 1.243344 0.794702 0.594530321 1.465465465
2003 1.157958 0.7587035 0.627078385 1.378674352
2004 1.196388 0.814978 0.608462775 1.421558164
2005 1.200639 0.7326007 0.648760331 1.421319797
2006 1.145114 0.7635328
Total 9.783162 6.4167053 4.935732468 10.69466207
Mean 1.222895 0.8020882 0.616966559 1.336832758 3.97878273
adjusted mean 1.229416 0.8063654 0.620256596 1.343961557 4
adjusted seasonal
index 122.9416 80.636538 62.02565964 134.3961557 400

Interpretation :
1) In winter the amount of production is 122.9416 which are 22.94% higher than
the annual average production.
2) In spring 2010 the amount of production is 80.636538 which are 19.3345%
lower than the annual average production.
3) In summer 2010 the amount of production is 62.02565964 which are 37.97444
% lower than the annual average production.
4) In fall 2010 the amount of production is 134.3961557 which are 34.396155 %
higher than the annual average production.

Deseasonalized Production
350
y = 0.5184x + 89.453
300

250

200 Deseasonalized
Production
150
Linear (Deseasonalized
100 Production)

50

0
0 100 200 300 400 500

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 [ Statistics for Business and Economics]

Projected sales for 2007 for each quarter:

Estimated Typical Quarterly
Quarter Code(t)
production seasonal index forecasted
Winter 37 108.616 1.22942 133.5346827
Spring 38 109.134 0.80637 88.00238358
Summer 39 109.652 0.620256 68.01231091
Fall 40 110.17 1.343962 148.0642935

Base line production:

Y= 5.680x + 80.83

Y= 5.680*0 + 80.83

Y= 80.83

Plotted original and deseasonalize data with equation:

Deseasonalized Production
350
300 y = 5.6804x + 80.838

250
200 Deseasonalized
Production
150
Linear (Deseasonalized
100 Production)

50
0
0 10 20 30 40

Interpretation :
Threre is an original data and the deseasonalize data here and the deseasonalize
data is higher than the original data as “B” of Deseasonalize data is higher than
the original data. There is a higher flow of production.