Referring to Problem 16-44, in which the sales manager for Grossmieller Imports of New York City needs to forecast monthly sales,
a. Discuss why a double exponential smoothing model might be preferred over a single exponential smoothing model.
b. (1) Develop a double exponential smoothing model using α = 0.20 and β = 0.30 as smoothing constants. To obtain the starting values, use the regression trend line approach discussed in this section. (2) Determine the forecast for month 17. (3) Also compute the MAD for this model. (4) Graph the fitted values on the time-series graph.
c. Compare the results for this double exponential smoothing model with the “best” single exponential smoothing model developed in part c of Problem 16-44. Discuss which model is preferred.
d. Referring to part b, try different alpha and beta values in an attempt to determine an improved forecast model for monthly sales. For each model, show the forecast for period 17 and the MAD. Write a short report that compares the different models.
e. Referring to part d and to part c for Problem 16-44, write a report to the Grossmieller sales manager that indicates your choice for the forecasting model, complete with your justification for the selection.