Question

Welsh Gas is one of the largest utility companies in Wales. The company gathered quarterly data for the demand of Gas (in 100,000 cubic feet), reported in the following table Demand Quarterfor Gas Time Year 1481 1241 948 1286 1616 1361 975 1211 1755 1511 1132 1575 1965 1181 10 12 13 14 15 16 (a) The linear regression model (without seasonal adjustment) of the Demand of Gas on Time is as followS Gas= 1217.55 + 20.90 Time with R2-0.0894 and significance levels of. QUESTION CONTINUED IN THE NEXT PAGE Standard Coefficients Errort Stat P-value Intercept 1217.555 163.9284 7.427359 7.97E-06 Time 20.90934 19.25241 1.086063 0.298787 Use the ratio-to-trend method to forecast the Demand of Gas for the next two quarters (i.e., for quarters 3 and 4 ofyear 4)

Answer 1

t	Actual Demand	Unadjusted Trend Forecast	Actual Demand/Trend	Seasonal Indices	Adjusted (Deseasonalized) Forecast
1	1481	1238.45	1.196	1.247	1543.78
2	1241	1259.35	0.985	0.960	1209.01
3	948	1280.25	0.740	0.746	954.82
4	1286	1301.15	0.988	0.979	1273.18
5	1616	1322.05	1.222	1.247	1648.00
6	1361	1342.95	1.013	0.960	1289.27
7	975	1363.85	0.715	0.746	1017.17
8	1211	1384.75	0.875	0.979	1354.98
9	1755	1405.65	1.249	1.247	1752.21
10	1511	1426.55	1.059	0.960	1369.53
11	1132	1447.45	0.782	0.746	1079.52
12	1575	1468.35	1.073	0.979	1436.79
13	1965	1489.25	1.319	1.247	1856.42
14	1181	1510.15	0.782	0.960	1449.79

Year	Quarter	t	Forecast Demand
4	3	17	1566.34
	4	18	1586.59