The following data are for shoe store sales in the United States in millions of dollars after being seasonally adjusted (SASSS).

a. Make a linear trend forecast for SASSS though the first seven months of 2007. Given that the actual seasonally adjusted values for 2007 were the following, calculate the RMSE for 2007.
Date SASSS
Jan-07€¦€¦€¦€¦€¦€¦..2,317
Feb-07€¦€¦€¦€¦€¦€¦..2,224
Mar-07€¦€¦€¦€¦€¦€¦..2,279
Apr-07€¦€¦€¦€¦€¦€¦..2,223
May-07€¦€¦€¦€¦€¦€¦.2,250
Jun-07€¦€¦€¦€¦€¦€¦...2,260
Jul-07€¦€¦€¦€¦€¦€¦€¦2,305
b. Reseasonalize the 2007 forecast and the 2007 actual sales using the following seasonal indices:
c. Plot the final forecast along with the actual sales data. Does the forecast appear reasonable? Explain.
Month SI
Jan€¦€¦€¦€¦€¦€¦€¦€¦€¦€¦..0.74
Feb€¦€¦€¦€¦€¦€¦€¦€¦€¦€¦..0.81
Mar€¦€¦€¦€¦€¦€¦€¦€¦€¦€¦.1.00
Apr€¦€¦€¦€¦€¦€¦€¦€¦€¦€¦.1.03
May€¦€¦€¦€¦€¦€¦€¦€¦€¦€¦1.04
Jun€¦€¦€¦€¦€¦€¦€¦€¦€¦€¦.0.98
Jul€¦€¦€¦€¦€¦€¦€¦€¦€¦€¦..0.98
Aug€¦€¦€¦€¦€¦€¦€¦€¦€¦€¦1.23
Sep€¦€¦€¦€¦€¦€¦€¦€¦€¦€¦.0.96
Oct€¦€¦€¦€¦€¦€¦€¦€¦€¦€¦.0.94
Nov€¦€¦€¦€¦€¦€¦€¦€¦€¦€¦0.98
Dec€¦€¦€¦€¦€¦€¦€¦€¦€¦€¦1.31
d. Why do you think the April, May, August, and December seasonal indices are greater than 1?

Transcribed Image Text:

Date SASSS Date SASSS Date SASSS Date SASSS Jan-921,627Jan-96 745 Jan-00 1,885 Jan-04 1,969 Feb-92 1,588 Feb-96 1,728 Feb-00 1,885 Feb-04 1,989 Mar-921,567 Mar-96 1,776 Mar-00 1,925 Mar-04 2,040 Apr-921,578 Apr-96 1,807Apr-00 1,891 Apr-04 1,976 May-92 1,515 May-96 1,800 May-00 1,900 May-04 1,964 Jun-92 1,520 Jun-96 1,758 Jun-00 1,888 Jun-04 1,947 Jul-92 1,498 Jul-96 1,784 Jul-00 1,865 Jul-04 1,961 Aug-92 1,522 Aug-96 1,791 Aug-00 1,921 Aug-04 1,931 Sep-92 1,560 Sep-96 1,743 Sep-00 1,949 Sep-04 1,960 Oct-921,569 Oct-961,785 Oct-001,923Oct-041,980 Nov 921,528 Nov-96 1,765 Nov-00 1,922 Nov-04 ,944 Dec-92 1,556 Dec-96 1,753 Dec-00 1,894 Dec-04 2,014 Jan-93 1,593 Jan-97 1,753 Jan-01 1,908 Jan-05 2,013 Feb-93 1,527 Feb-97 1,790 Feb-01 1,855 Feb-05 2,143 Mar-93 1,524 Mar-971,830 Mar-01 1,858 Mar-05 2,002 Apr-93 1,560 Apr-971,702Apr-01 1,941 Apr-05 2,090 May-93 1,575 May-97 1,769 May-01 1,938 May-05 2,104 Jul-93 Jun-93 1,588 Jun-97 1,793Jun-01 1,901 Jun-05 2,114 Aug-93 1,602 Aug-97 1,789 Aug-01 1,963 Aug-05 2,098 Sep-93 1,624 Sep-971,791 Sep-01 1,838 Sep-05 2,105 Oct-93 1,597 Oct-97 1,799 0ct-01 1,877 Oct-05 2,206 Nov-93 ,614 Nov-97 1,811 Nov-01 1,927 Nov-05 2,232 Dec-93 1,644 Dec-971,849Dec-011,911Dec-05 2,194 Jan-94 1,637 Jan-98 1,824 Jan-02 1,962 Jan-06 2,28 Feb-94 1,617 Feb-98 1,882 Feb-021,980 Feb-06 2,271 Mar-94 1,679 Mar-98 1,859 Mar-02 1,955 Mar-06 2,165 Apr-94 1,607 Apr-98 1,831 Apr-02 1,967 Apr-06 2,253 May-941,623 May-98 1,832 May-02 1,940 May-06 2,232 Jun-941,619 Jun-981,842 Jun-021,963 Jun-06 2,237 Jul-94 1,667 Jul-981,874Jul-02 1,920Jul-06 2,231 Aug-94 1,660 Aug-98 1,845 Aug-02 1,937 Aug-06 2,278 Sep-94 1,681 Sep-98 1,811 Sep-02 1,867 Sep-06 2,259 Oct-94 1,696 Oct-98 1,898 Oct-02 1,918 Oct-06 2,231 Nov-94 1,710 Nov-981,878 Nov-021,914 Nov-06 2,217 Dec-94 1,694Dec-98 90 Dec-02 1,931 Dec-06 2,197 Jan-95 1,663 Jan-99 1,916 Jan-03 1,867 Feb-95 1,531 Feb-991,894 Feb-03 1,887 Mar-95 1,707 Mar-99 1,883 Mar-031,939 Apr-95 1,707 Apr-99 1,871 Apr-03 1,860 May-95 1,715 May-99 1,918 May-03 1,898 Jun-95 1,735 Jun-99 1,943 03 1,924 Jul-95 Aug-95 ,695 Aug-99 1,892 Aug-03 1,994 Sep-95 1,721 Sep-99 1,893 Sep-03 1,966 Oct-951,698Oct-99 1,869 Oct-03 1,943 Nov-95 1,770Nov-99 ,867 Nov-03 1,973 Dec-951,703 Dec-99 1,887Dec-03 1,976 1,567 Jul-97 1,801 ul-01 1,964 Jul-05 2,124 1,692 Jul-99 1,905ul-03 1,967 2