Chapter 17.5, Problem 34E

Three years of monthly lawn-maintenance expenses ($) for a six-unit apartment house in southern Florida follow.

1. a. Construct a time series plot. What type of pattern exists in the data?
2. b. Develop an estimated regression equation that can be used to account for any seasonal and linear trend effects in the data. Use the following dummy variables to account for the seasonal effects in the data: Jan = 1 if January, 0 otherwise; Feb = 1 if February, 0 otherwise; Mar = 1 if March, 0 otherwise; … Nov = 1 if November, 0 otherwise. Note that using this coding method, when all the 11 dummy variables are 0, the observation corresponds to an expense in December.
3. c. Compute the monthly forecasts for next year based upon both trend and seasonal effects.