1. A time series plot. Comment on the underlying pattern in the time series.

2. Using the dummy variable approach, forecast sales for January through December of

the fourth year.

3. For the time series, what is its underlying pattern?

A) Stationary with seasonality

B) Upward trend with seasonality

C) Upward trend without seasonality

D) Downward trend with seasonality

E) Downward trend without seasonality

4. What are the total forecast error and the total absolute error of the naive method (in $1,000s)? Compute this error over 36 months including that January sales for the fourth year are $295,000.

5. Given that January sales for the fourth year were predicted at $286,750, what is its absolute percentage error (in %)?

6. Using a dummy variable approach with 13 independent variables (one for months from 1 to 36, and one each or 12 in total for the individual months), forecast sales for January in the fifth year. Round to a full number.

7. Using the dummy variable approach with 13 independent variables, which months are insignificant (i.e., their coefficients are not significantly different from zero)?

The Vintage Restaurant, on Captiva Island near Fort Myers, Florida, is owned and oper- ated by Karen Payne. The restaurant just completed its third year of operation. During that time, Karen sought to establish a reputation for the restaurant as a high-quality dining establishment that specializes in fresh seafood. Through the efforts of Karen and her staff, her restaurant has become one of the best and fastest-growing restaurants on the island. To better plan for future growth of the restaurant, Karen needs to develop a system that will enable her to forecast food and beverage sales by month for up to one year in advance. The following table shows the value of food and beverage sales ($1,000s) for the first three years of operation: Month First Year Second Year Third Year January February March April May June July August September October November December 242 235 232 178 184 140 145 152 110 130 152 206 263 238 247 193 193 149 157 161 122 130 167 230 282 255 265 205 210 160 166 174 126 148 173 235 Managerial Report Perform an analysis of the sales data for the Vintage Restaurant. Prepare a report for Karen that summarizes your findings, forecasts, and recommendations. Include the following