Q7. (35 Points)

The Cancun Taco Quick Stop Restaurant

After tallying the receipts for their first year of operation, the family owners of the Cancun Taco Quick Stop are encouraged. Sales of their artisanal tacos, made from such exotic ingredients as ground beef, cheese, and beans, have been strong and seem to give hope to the coming year. Cancun Taco sales revenue by month are shown in the table below. Data in this table will be used to answer parts a to h.

Time Period	Month	Sales Revenue
1	January	474
2	February	485
3	March	501
4	April	588
5	May	579
6	June	673
7	July	594
8	August	679
9	September	608
10	October	699
11	November	732
12	December	732

a) Armed only with her fingers, the owner operator decides that the safest demand forecasting approach is a moving average of two periods. Her fingers are aching by the time she reaches the month of May and she is worried about her ability to stuff tacos during tomorrow's dinner rush. Help her out by finding the forecast for the month of June sales revenue.

b) Armed only with her fingers, the owner operator decides that the safest demand forecasting approach is a weighted moving average using 0.6, 0.3, and 0.1 for the most recent three. Her fingers are aching by the time she reaches May and she is worried about his ability to stuff tacos during tomorrow's dinner rush. Help her out by finding the sales demand forecast for June.

c) Armed only with her fingers, the owner operator decides that the safest demand forecasting approach is exponential smoothing with an alpha of 0.8. She uses the January sales demand and the January demand forecast just to get the ball rolling. Her fingers are aching by the time she reaches March and she is also worried about her ability to stuff tacos during tomorrow's dinner rush. Help her out by finding the sales demand forecast for April.

d) Armed only with her fingers, the owner operator decides that the safest forecasting approach is a linear trend line. Her fingers are aching by the time she reaches May and she is worried about her ability to stuff tacos during tomorrow's dinner rush. Help her out by finding the sales demand forecast for June.

e) Armed only with his fingers, the owner decides that the safest forecasting approach is a weighted moving average using 0.6, 0.3, and 0.1 for the most recent three. Generate a forecast for the year using this technique and then calculate forecast errors using MAD. What is the mean absolute deviation for this forecasting approach?

f) Armed only with her fingers, the owner decides that the safest forecasting approach is exponential smoothing with an alpha of 0.8. She uses the January sales demand and the January sales demand forecast just to get the ball rolling. Generate a forecast for the year using this technique and then calculate forecast errors using MAD. What is the mean absolute deviation for this demand forecasting approach?

g) Armed only with his fingers, the owner decides that the safest forecasting approach is a linear trend line. Generate a forecast for the year using this technique and then calculate forecast errors using MAD. What is the mean absolute deviation for this forecasting approach?

h) Armed only with his fingers, the owner decides that the safest forecasting approach is exponential smoothing with an alpha of 0.8. He uses the January demand and the January forecast just to get the ball rolling. Generate a forecast for the year using this technique and then calculate forecast errors using MSE. What is the mean squared error for this forecasting approach?