Management of the ABC Floral Shop believes that its sales are seasonal in nature with a monthly seasonal pattern and no trend. The demand data and seasonal ratios for the past three years are given as follows.

a. Calculate a forecast for Year 3 using A0 = 15,000, α = γ = .3, and the seasonal ratios shown above. For each period, calculate the forecast and the updated seasonal ratio.

b. Plot the original data and the forecast on a graph.

c. Calculate the tracking signals for the past year using MAD0 =

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Year 1 Month Demand Year 2 Demand Year 3 Seasonal Demand Ratio Jan. $12,400 $11,800 $13,600 0.8 Feb. 23,000 24,111 21,800 1.8 Mar. 15,800 16,500 14,900 0.9 Apr. 20,500 21,000 19,400 1.6 May 25,100 24,300 26,000 2.0 June 16,200 15,800 16,500 1.0 July 12,000 11,500 12,400 0.7 Aug. 10,300 10,100 10,800 0.6 Sept. 11,800 11,000 12,500 0.7 Oct. 14,000 14,300 13,800 1.2 Nov. 10,700 10,900 10,600 0.9 Dec. 7,600 7,200 8,100 0.6