1.Prepare a graph of the data. On this same graph, plot a12-month moving average
ID: 408388 • Letter: 1
Question
1.Prepare a graph of the data. On this same graph, plot a12-month moving average forecast. Discuss any apparenttrend and seasonal patterns.
2.Use regression to develop a trend line that could be usedto forecast monthly sales for the next year. Is the slope of this line consistent with what you observed in question 1?If not, discuss a possible explanation.
3.Use the multiplicative decomposition model on thesedata. Use this model to forecast sales for each month of the next year. Discuss why the slope of the trend equationwith this model is so different from that of the trend equa-tion in question 2.
Monthly Revenue (in $1,000s)
MONTH 2008 2009 2010
January 438 444 450
February 420 425 438
March 414 423 434
April 318 331 338
May 306 318 331
June 240 245 254
July 240 255 264
August 216 223 231
September 198 210 224
October 225 233 243
November 270 278 289
December 315 322 335
Explanation / Answer
solution :-
1.The scatter plot of the data shows a definite seasonal pattern with higher sales in the winter months and lower sales in the summer and fall months. There is a slight upward trend as evidenced by the fact that for each month, the sales increased from the first year to the second, and again form the second year to the third.
2. A trend line based on the raw data is found to be:
Y = 330.889 – 1.162X
The slope of the trend line is negative which would indicate that sales are declining over time.
Also,this question is not a part of operation management.
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