This is a home work question I am stuck on. Thanks for some help. Develop a casu

Question

This is a home work question I am stuck on. Thanks for some help.

Develop a casual regression model to forecast that include both time and the introduction of a new chip as explanatory variables . what would the forecast be if a new chip was introduced and what would it be if a new chip was not introduced.

Microprocessor Data Demand Month New Chip Introduced 3949 1 0 3544 2 0 6138 3 0 7752 4 0 10700 5 1 7766 6 0 5482 7 0 8789 8 0 13103 9 1 7326 10 0 8669 11 0 7219 12 0 7456 13 0 9744 14 0 14561 15 1 8564 16 0 12214 17 0 19020 18 1 14751 19 0 14269 20 0 14896 21 0 15359 22 0 16527 23 0 17029 24 0

Explanation / Answer

The regression model is

Demand=3097.183+535.5705Month+4955.863NCI

if a new chip was introduced for the forecast month assume 25 is

Demand=3097.183+535.5705Month+4955.863NCI

            =3097.183+535.5705*25+4955.863*1

           = 21442.3093

if a new chip was not introduced for the forecast month assume 25 is

Demand=3097.183+535.5705Month+4955.863NCI

            =3097.183+535.5705*25+4955.863*0

            = 16486.4458

Regression Statistics Multiple R 0.94426683 R Square 0.89163984 Adjusted R Square 0.88131983 Standard Error 1513.45939 Observations 24 ANOVA df SS MS F Significance F Regression 2 395804463.8 1.98E+08 86.39909 7.34735E-11 Residual 21 48101746.12 2290559 Total 23 443906210 Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0% Intercept 3097.18301 658.7938872 4.701293 0.000122 1727.146122 4467.21989 1727.14612 4467.219889 Month 535.570513 44.68196631 11.98628 7.44E-11 442.649278 628.491749 442.649278 628.4917488 New Chip Introduced 4955.86346 829.9306893 5.971418 6.31E-06 3229.928117 6681.79881 3229.92812 6681.798807

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