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 year $1$ through year $5$:

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

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

b$.$ Based on MAD for from year $3$ to year $5,$ 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 revenue for year $6$ and year $7$ based on your preferred method $(20$

points$)$