While U.S. inventory levels remain low, there is a slight indication of an increase in the U.S. business inventory-to-sales ratio, due to higher sales (The Wall Street Journal, December 15, 2010). The accompanying table shows a portion of seasonally adjusted inventory to- sales ratios from January 2008 to October 2010.

Year..................... Month ................Inventory-to-Sales

2008.......................... Jan................................ 1.28

2008.......................... Feb............................... 1.30

⋮................................. ⋮................................................ ⋮

2010........................... Oct............................... 1.27

a. Plot the above series. Which polynomial trend model do you think is most appropriate?

b. Verify your answer by formally comparing the linear, quadratic, and cubic trend models.

c. Make a forecast for the inventory-to-sales ratio for November and December of 2010.