QUESTION $20$

$(3$ points$)$ Referencing the question above, Jason liked your recommendation and decided to consolidate ski manufacturing at the location you recommended. A year has passed, and the consolidation is complete. He now wants you to forecast what the demand will be for December. Actual demand for the last six months is contained in the table below. $($CH $5)$

Period Actual Demand

June $30$

July $40$

August $50$

September $61$

October $71$

November $80$

Create a forecast for December using; $($Please show your work$)$

$3$ period moving average $($simple average$)$

Weighted average using $\mathrm{.}5,\mathrm{.}3,$ and $\mathrm{.}2$ weights for the preceding $3$ months $($heaviest weight for the most recent month$).$

Which of these methods do you believe would be more accurate to forecast demand for ski sales, and why?

Comment on how weights might be established and if these weights seem reasonable?

Due to competitive pressure and the volatility of the seasonal ski market, Jason would like to expand forecasting to include other factors beyond previous demand.

Discuss how simple and multiple linear regression could be used to increase forecasting ability.

What variables might you consider as part of those forecasting models, and why would you recommend those variables in this example?