2 We are to predict sales for a motel chain based on the information in Table 26 (file Motel.xls).

a Use this data and multiple regression to make predictions for the motel chain’s sales during the next four quarters. Assume that advertising during each of the next four quarters is $50,000.

b Use the Holt method to make forecasts for the motel chain’s sales during the next four quarters.
c Use simple exponential smoothing to make predictions for the motel chain’s sales during the next four quarters.
d Use Winter’s method to determine predictions for the motel chain’s sales during the next four quarters.
e Which forecasts would be expected to be the most reliable? (Hint: Use advertising, lagged by one period, as an independent variable.)

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TABLE 26 Potential Customers Advertising (thousands of Sales Quarter (thousands) dollars) Season (millions) 12 100 30 Winter 1,200 105 20 Spring 880 3 111 15 Summer 1,800 4 117 40 Fall 1,050 5 122 10 Winter 1,700 6 128 50 Spring 350 7 135 5 Summer 2,500 8 142 40 Fall 760 196 149 20 Winter 2,300 10 156 10 Spring 1,000 11 164 60 Summer 1,570 12 172 5 Fall 2,430 13 181 35 Winter 1,320 14 190 15 Spring 1,400 15 200 70 Summer 1,890 16 210 25 Fall 3,200 7892 17 221 30 Winter 2,200 18 232 60 Spring 1,440 19 243 80 Summer 4,000 20 264 60 Fall 4,100