Canton Supplies, Inc., is a service firm that employs approximately 100 individuals. Managers of Canton Supplies are concerned about meeting monthly cash obligations and want to develop a forecast of monthly cash requirements. Because of a recent change in operating policy, only the past seven months of data that follow are considered to be relevant.

a. Construct a time series plot. What type of pattern exists in the data?
b. Use Holt's linear exponential smoothing with α = .6 and β = .4 to forecast cash requirements for each of the next two months.
c. Using Minitab or Excel, develop a linear trend equation to forecast cash requirements for each of the next two months.
d. Would you recommend using Holt's linear exponential smoothing with α = .6 and β = .4 to forecast cash requirements for each of the next two months or the linear trend equation? Explain.

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Month Cash Required ($1000s) 205 212 218 224 230 240 246