Use the data from exercise #13 on p. 185 in the textbook to answer the following questions.

1. construct 2-quarter and 4-quarter moving average forecasts for the quarterly sales for years 2 through 10. compute the mse for each forecasting model. of these two forecasting models, which would you recommend? why?

2. construct exponential smoothing forecasts for the quarterly sales for years 2 through 10 using a smoothing constant of  = 0.10. use the average quarterly sales in year 1 as the initial forecast for the first quarter of year 2. a. use data sensitivity (via analytic solver platform) to compute and chart the mse for different values of  from 0.00 to 1.00 in increments of 0.05. from this analysis, what value of  appears to yield the smallest value of mse? b. use optimization (via analytic solver platform) to find the precise value of alpha that minimizes mse.

3. construct a static trend line forecast of quarterly sales for years 1 through 10 using linear regression to find the slope and intercept.

4. construct a static forecast model with trend and seasonality for quarterly sales for years 1 through 10 using optimization (via asp) to find the intercept, slope, and seasonal factors that minimize mse.

5. given your analysis for the questions above, which of the forecasting methods above would you recommend to forecast the quarterly sales? why? 185 exercises 13. big box, the local discount retailer, is negotiating a major e expansion with the planning board. it has been asked as part of this process to develop a sales forecast for the next several years. quarterly sales data for the past 10 years are given in the 0 0 following table: 0 20 year q1 02 q3 q4 20 94.28 83.80 115.23 125.71 1 0 87.02 119.65 130.52 2 97.89 139.26 104.45 92.84 127.66 3 20 148.15 98.77 111.11 135.81 4 141.24 154.08 5 115.56 102.72 0 161.96 148.47 107.97 6 121.47 10 156.33 170.54 127.90 113.69 7 178.93 164.02 119.29 134.20 ly rs 188.00 172.33 141.00 125.33 198.59 182.04 132.39 10 148.94 s g appropriate forecast using a moving-average develop approach. b. develop an appropriate forecast using a simple exponential smoothing approach. develop an appropriate forecast using exponential smooth- ing with a trend (holt's method). d. develop an appropriate forecast using exponential smooth- ing with trend and cyclicality (the holt-winters method). an a. es a c. er e e. which of the four forecasts developed above would you recommend using? 14. coastal fuel oil is a distributor of fuel-oil products in the northeast. it contracts with shippers for deliveries of home heating oil and distributes product in its own trucks. since its storage capacity is limited, and purchasing storage for fuel oil it itcelf is expensive, accurate demand forecasts are 10 uaars are given in