The manager of a financial investment office is evaluated based on the number of new clients generated each quarter. The following data reflect the number of new customers added during each quarter from 2012 to 2015.

2012 2013 1st quarter 218 1st quarter 250 2nd quarter 190 2nd quarter 220 3rd quarter 236 3rd quarter 265 4th quarter 218 4th quarter 241 2014 2015 1st quarter 244 1st quarter 229 2nd quarter 228 2nd quarter 221 3rd quarter 263 3rd quarter 248 4th quarter 240 4th quarter 231

a. Plot the time series and discuss the components that are present in the data.

b. Referring to part

a, fit the linear trend model to the data for the years 2012 through 2014. Then use the resulting model to forecast the number of new brokerage customers for each quarter in the year 2015. Compute the MAD and MSE for these forecasts and discuss the results.

c. Using the data for the years 2012 through 2014, determine the seasonal indexes for each quarter.

d. Develop a seasonally unadjusted forecast for the four quarters of year 2015.

e. Using the seasonal indexes computed in part d, determine the seasonally adjusted forecast for each quarter for the year 2015. Compute the MAD and MSE for these forecasts.

f. Examine the values for the MAD and MSE in parts b and

e. Which of the two forecasting techniques would you recommend the manager use to forecast the number of new clients generated each quarter?

Support your choice by giving your rationale.

Computer Software Exercises