Case Study Questions (continued) 4. Assuming a multiplicative model, obtain the cyclical components. Does there seem to be a cyclical pattern? 5. Prepare a forecast of water use in Fort Worth for the last three months of 2006 and the first month of 2007 using only the trend equation. Use the seasonal indexes to adjust the deseasonalized forecasts. 6. In January 2007 , the actual water use turned out to be 325.6 . Discuss the forecasting error encountered here. (in Tens of Millions of Gallons) Forecasting Water Usage of the Holly Water Treatment Complex Fort Worth, Texas The Water Department of the city of Fort Worth, Texas, has to purchase untreated lake water from several administrative entities around the city in order to fulfill the water requirements of its population. Most of the water is treated and pumped at one of two plants - The Holly Water Treatment Complex and the Rolling Hills Plant. The rolling Hills Plant is located on the southeast side of Fort Worth and is on a higher plain than the west-side Holly Treatment Plant. Both plants are required to operate in order to meet the city's demand however, the electrical cost of pumping water out of the Holly Treatment Plant is approximately 15% higher than for the Rolling Hills Plant because of its lower elevation. Because of the cost differential, the water pumped from the tow plants has been slowly approaching a 60-40 split in favor of the Rolling Hills Plant. For budgetary reasons, the City Manager would like you to forecast the water processed and pumped at the Holly Treatment Plant. He will use your forecasts as a basis for estimating the associated electrical cost. You are informed that water consumption varies from fall to spring and summer to winter. There is also a gradual increase in the water demand at the Holly Treatment Plant because the total demand made by the population has slowly increased. Case Study Questions (continued) 4. Assuming a multiplicative model, obtain the cyclical components. Does there seem to be a cyclical pattern? 5. Prepare a forecast of water use in Fort Worth for the last three months of 2006 and the first month of 2007 using only the trend equation. Use the seasonal indexes to adjust the deseasonalized forecasts. 6. In January 2007 , the actual water use turned out to be 325.6 . Discuss the forecasting error encountered here. (in Tens of Millions of Gallons) Forecasting Water Usage of the Holly Water Treatment Complex Fort Worth, Texas The Water Department of the city of Fort Worth, Texas, has to purchase untreated lake water from several administrative entities around the city in order to fulfill the water requirements of its population. Most of the water is treated and pumped at one of two plants - The Holly Water Treatment Complex and the Rolling Hills Plant. The rolling Hills Plant is located on the southeast side of Fort Worth and is on a higher plain than the west-side Holly Treatment Plant. Both plants are required to operate in order to meet the city's demand however, the electrical cost of pumping water out of the Holly Treatment Plant is approximately 15% higher than for the Rolling Hills Plant because of its lower elevation. Because of the cost differential, the water pumped from the tow plants has been slowly approaching a 60-40 split in favor of the Rolling Hills Plant. For budgetary reasons, the City Manager would like you to forecast the water processed and pumped at the Holly Treatment Plant. He will use your forecasts as a basis for estimating the associated electrical cost. You are informed that water consumption varies from fall to spring and summer to winter. There is also a gradual increase in the water demand at the Holly Treatment Plant because the total demand made by the population has slowly increased