Tom and Hank’s is a regional convenience store with locations in several small towns along the Mississippi River. The quarterly revenues for the store beginning with the first quarter of 2005 and ending with the second quarter of 2011 are listed here.

Period Sales Period Sales 1Q05 $ 304,072 2Q08 $ 414,776 2Q05 $ 241,146 3Q08 $ 409,164 3Q05 $ 251,719 4Q08 $ 397,537 4Q05 $ 247,792 1Q09 $ 548,111 1Q06 $ 370,434 2Q09 $ 412,788 2Q06 $ 291,448 3Q09 $ 417,408 3Q06 $ 297,308 4Q09 $ 406,495 4Q06 $ 286,892 1Q10 $ 586,479 1Q07 $ 415,718 2Q10 $ 468,013 2Q07 $ 325,157 3Q10 $ 480,706 3Q07 $ 336,537 4Q10 $ 466,087 4Q07 $ 387,424 1Q11 $ 667,478 1Q08 $ 546,057 2Q11 $ 522,337

a. Produce a time-series plot of the store’s revenues by quarter. What time-series components appear to be present in the data?

b. Determine a seasonal index for each quarter.

c. Use the seasonal indexes from part b to deseasonalize the data.

d. Graph and fit a linear trend line to the deseasonalized data.

e. Use the linear trend line and the seasonal indexes to produce a seasonally adjusted forecast for each quarter beginning with quarter 1 of 2005 and ending with quarter 2 of 2011.

f. Calculate a forecast error for each period.

g. Calculate the MAD and the MSE for the forecasts you developed in part e.

h. Using the seasonal indexes and the estimated trend line, produce forecasts for quarters 3 and 4 of 2011.