South Shore Construction builds permanent docks and seawalls along the southern shore of Long Island, New York. Although the firm has been in business only five years, revenue has increased from in the first year of operation to in the most recent year. The following data show the quarterly sales revenue in thousands of dollars. Quarter Year 1 Year 2 Year 3 Year 4 Year 5
1 10 46 79 102 182
2 106 146 159 200 291
3 174 253 322 380 441
4 18 18 41 85 171

Required:
a. Construct a time series plot. What type of pattern exists in the data?
b. Use the following dummy variables to develop an estimated regression equation to account for seasonal effects in the data. Qtr1 = 1 if Quarter 1, 0 otherwise; Qtr2 = 1 if Quarter 2, 0 otherwise; Qtr3 = 1 if Quarter 3, 0 otherwise. Based only on the seasonal
effects in the data, compute estimates of quarterly sales for year 6.
c. Let Period = 1 to refer to the observation in quarter 1 of year 1; Period = 2 to refer to the observation in quarter 2 of year 1; . . . and Period = 20 to refer to the observation in quarter 4 of year 5. Using the dummy variables defined in part (b) and Period, develop
an estimated regression equation to account for seasonal effects and any linear trend in the time series. Based upon the seasonal effects in the data and linear trend, compute estimates of quarterly sales for year 6.