The manager needs to be able to forecast demand for each month next year. However, the standard forecasting models discussed

in chapter $8$ will not fit the data observed for the $2$ years.

$1)$ What are the weaknesses of the standard forecasting techinques as applied to this set of data? $1\%$

$2)$ Because known models are not appropriate here, propose your own approach to forecasting

$($note$,$ there are no right or wrong answer as long as you can justify$).1\%$

$3)$ Forecast demand for each month next year using the model you propose. $1\%$

Demand in thousand

Month Last year This year

January $517$

February $614$

March $1020$

April $1323$

May $1830$

June $1538$

July $2344$

August $2641$

September $2133$

October $1523$

November $1226$

December $1417$