• All work must be done in Excel.
  • Clearly indicate which sub-question is being answered
• Show formulas for all calculations.
• Clearly highlight your final answers

Problem-3 (30 pts)

A retail store sells space heaters. Sales data for four years is provided in the tab Space Heaters.

1. Plot the time series. Describe the time series in a few sentences. (4 pts)
2. Calculate the seasonal index for each quarter. What are the implications of these indexes? (8 pts)
3. Calculate the trend equation for this data. Explain what the slope and intercept mean in this context. (8 pts)
4. Using the multiplicative decomposition method calculate forecasts for each quarter of Year 5. (10 pts)

A B B Year 1 Nm 1 2 2 3 4 5 5 1 1 1 2 6 7 2 000 2 2 3 8 9 10 11 12 13 Quarter 1 1 2 3 4 1 1 2 3 4 1 2 3 4 1 2 3 4 Sales 810 481 732 436 1025 781 877 545 1217 940 11901 727 1399 1200 1236 853 3 3 14 15 16 17 3 4 4 4 4