Big Box, the local discount retailer, is negotiating a major expansion with the Planning Board. It has been asked as part of this process to develop a sales forecast for the next several years. Quarterly sales data for the past 10 years are given in the following table:

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Year Q1 1 2 3 4 5 6 7 8 9 02 03 Q4 94.28 83.80 115.23 125.71 97.89 87.02 119.65 130.52 104.45 92.84 127.66 139.26 111.11 98.77 135.81 148.15 115.56 102.72 141.24 154.08 121.47 107.97 148.47 161.96 127.90 113.69 156.33 170.54 134.20 119.29 164.02 178.93 141.00 125.33 172.33 188.00 10 148.94 132.39 182.04 198.59 a. Develop an appropriate forecast using a moving-average approach. b. Develop an appropriate forecast using a simple exponential smoothing approach. c. Develop an appropriate forecast using exponential smooth- ing with a trend (Holt's method). d. Develop an appropriate forecast using exponential smooth- ing with trend and cyclicality (the Holt-Winters method). e. Which of the four forecasts developed above would you recommend using? Year Q1 1 2 3 4 5 6 7 8 9 02 03 Q4 94.28 83.80 115.23 125.71 97.89 87.02 119.65 130.52 104.45 92.84 127.66 139.26 111.11 98.77 135.81 148.15 115.56 102.72 141.24 154.08 121.47 107.97 148.47 161.96 127.90 113.69 156.33 170.54 134.20 119.29 164.02 178.93 141.00 125.33 172.33 188.00 10 148.94 132.39 182.04 198.59 a. Develop an appropriate forecast using a moving-average approach. b. Develop an appropriate forecast using a simple exponential smoothing approach. c. Develop an appropriate forecast using exponential smooth- ing with a trend (Holt's method). d. Develop an appropriate forecast using exponential smooth- ing with trend and cyclicality (the Holt-Winters method). e. Which of the four forecasts developed above would you recommend using?

Answer rating: 100% (QA)

a Using a movingaverage approach the forecast for year 11 would be Q1 9428 9789 10445 11111 11556 5 ... View the full answer