Barbara Lynch is the product manager for a line of skiwear produced by HeathCo Industries and privately
Question:
Barbara Lynch is the product manager for a line of skiwear produced by HeathCo Industries and privately branded for sale under several different names, including Northern Slopes and Jacque Monri. A new part of Ms. Lynch’s job is to provide a quarterly forecast of sales for the northern United States: a 10-year sales history is shown below:
Sales ($000) | ||||
Year | 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter |
2007 | $72,962 | $81,921 | $97,729 | $ 142,161 |
2008 | 145,592 | 117,129 | 114,159 | 151,402 |
2009 | 153,907 | 100,144 | 123,242 | 128,497 |
2010 | 176,076 | 180,440 | 162,665 | 220,818 |
2011 | 202,415 | 211,780 | 163,710 | 200,135 |
2012 | 174,200 | 182,556 | 198,990 | 243,700 |
2013 | 253,142 | 218,755 | 225,422 | 253,653 |
2014 | 257,156 | 202,568 | 224,482 | 229,879 |
2015 | 289,321 | 266,095 | 262,938 | 322,052 |
2016 | 313,769 | 315,011 | 264,939 | 301,479 |
a). Ms. Lynch has hired you to help with the forecasting effort. First, she would like you to prepare a time-series plot of the data and to write her a memo indicating what the plot appears to show and whether it seems likely that a simple linear trend would be useful in preparing forecasts.
b). In addition to plotting the data over time, you should estimate the least-squares trend line in the form:
c). Do your regression results indicate to you that there is a significant trend to the data? Explain why or why not.
d). On the basis of your results, prepare a forecast for the four quarters of 2017.
e). A year later, Barbara gives you a call and tells you that the actual sales for the four quarters of 2017 were: Q1 = 334,271, Q2 = 328,982, Q3 = 317,921, and Q4 = 350,118. How accurate was your model? What was the mean absolute percentage error (MAPE)?
Step by Step Answer:
Forecasting And Predictive Analytics With Forecast X
ISBN: 978-1259903915
7th edition
Authors: J. Holton Wilson, Barry Keating