K Month January February March April May June July August September October November December Demand in Megawatts Last Year Month January February 5 6 11 12 18 15 24 27 21 15 12 14 To plan for expansion and to arrange to borrow power from neighboring utilities during peak periods, the utility needs to be able to forecast demand for each month next year. However, the standard forecasting models will not fit the data observed for the 2 years. a) What are the weaknesses of the standard forecasting techniques as applied to this set of data? The standard forecasting techniques are not appropriate, because there is not enough data to make a good forecast and the given data contains both seasonal and trend factors. b) Because known models are not appropriate here, the following model is proposed to forecasting. The approach would be to calculate the increase from each month last year to each month this year, sum all 12 increases, and divide by 12. The forecast for next year would equal the value for the same month this year plus the average increase over the 12 months of last year. c) Forecast demand for each month next year using the proposed model.. The forecasts for the next year are (round your responses to the nearest whole numbers as needed): Last Year Demand in Megawatts This Year 5 6 This Year 15 15 20 15 15 23 32 39 45 40 33 22 25 18 Next Year 27

Sresereng meteis we not fi the data observed for the 2 years. The forecast for the neet year are pound your responses is me nearest whole fumbers as needed