Forecasting Homework

Problem $1$

In the past, Peter Kelle's car dealership in Baton Rouge sold an average of $800$ Ford F$150\text{'}$s each year. In

the past two years $200$ and $250,$ respectively, were sold in the fall; $250$ and $200$ were sold in winter; $50$

and $65$ were sold in the spring; and $300$ and $285$ were sold in the summer.

What are the seasonal indices for each season?

Peter is planning a major expansion in his dealership as a local minor competitor has just

closed. He expects demand for Ford F$150\text{'}$s to increase according to the following trend line:

Demand $=800+50T$

where $T$ is the number of years from today $($i$.$e$.$ this year is year zero, next year is year one$)$

Using the above seasonal indices and trend line, predict Peter's sales during fall, winter,

spring, and summer $8$ years from now.