Management believes there is a seasonal pattern in the above data for the Donut-Hole Shop (see problem 2), with the first two days of a week representing one level; the third and fourth days representing a second level; and the fifth, sixth, and seventh days a third level. Thus, three seasonal factors have been suggested: R0 = .9, R−1 = 1.3, and R−2 = .8.

a. Simulate a forecast of demand for days 1 to 7 using A0 = 85, T0 = 0, and α = β = γ = .1.

b. Comment on the appropriateness of the forecasts developed.