Q$3.($Total $25$ points$)$

Goodyear Tire and Rubber Company is the ninth largest tire manufacturer in the world.

Here are the sales revenues for the past five years:

a$.$ When might a manager prefer linear trend technique to simple moving average

technique? Explain your answer. $(5$ points$)$

b$.$ Based on MAD over years $3,4$ and $5,$ which method $($linear$-$trend or double exponential

smoothing method with $=0\mathrm{.}4$ and $=0\mathrm{.}2($start with initial estimates $S_1=$$$4,867\mathrm{.}90$

and $T_1=$$$201\mathrm{.}5$ for the year $1))$ provides the better forecasts? Explain. Forecast the

sales revenues for years $6$ and $7$ based on the better method $(20$ points$)$