Answer just letter e.

Beth's Hot Chips on-line business uses a T1 line to connect their electronic business to the internet. They have been in business for one year and have had the same bandwidth (Internet access capacity) for that entire year. Their percentage utilization is given as follows:

Month	Bandwidth
January	35.5%
February	38.2%
March	44.1%
April	47.7%
May	51.2%
June	55.9%
July	60.0%
August	62.3%
September	65.7%
October	71.1%
November	75.7%
December	79.3%

Produce a forecast for the next month (January of next year) using each of the following techniques:

please, answer just letter e.

e. What would you recommend to Beth regarding the forecast for the next month? Explain. Based on the analysis, estimate when will Beth need additional bandwidth?

Expert Answer

a. Three period moving average.

January Next Year forecast using three period moving average = 75.37%

Excel working:

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b. Three period weighted moving average using the weights of 1, 2, and 5.

Answer b)

January Next Year forecast using three period weighted moving average = 77.38%

Excel working:

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c. Exponential smoothing using the forecast for the first period of 35% and a = 0.8.

Answer c)

January Next Year forecast using Exponential smoothing = 78.35%

Excel working:

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d. Linear trend model.

Answer d)

January Next Year forecast using Linear Trend Model = 83.02%

Click on Insert tab & select the line graph. Line graph will appear.

Right click on the demand line and select "Add trendline".

Click on show equation, the trend line equation will appear.

Linear Trend line equation is:

y = 0.0397x + 0.3141

x is the period sequential number (for January next year, x = 13 as January this year is considered as 1; 1

12 months = 13)

y = 0.0397x + 0.3141

y = 0.0397*13 + 0.3141

Hence,

January Next Year forecast using Linear Trend Model = 83.02%

Excel working: