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Problem 1 GHM Company is a well-known automotive company in the United States. GHM has tracked the monthly sales of their main product, Ranger, over
Problem 1 GHM Company is a well-known automotive company in the United States. GHM has tracked the monthly sales of their main product, Ranger, over the past three years. GHM believes that there is an effect of seasons in their sales. Following are the results of CMA analysis of the monthly sales: Quarter Quarter Year Quarter 1 2 3 Quarter 4 - 0-8912 - 1 0207 1.0146 0.6076 Unadjusted seasonal - 1ndex Adjusted seasonal 1ndex a. Complete the table and calculate the Seasonal Index for all quarters. b. What is the interpretation of the seasonal index value? Problem 2 The following ratio-to-moving averages for the seasonally adjusted series were found by the decomposition method applied on a time series representing quarterly sales for January 2018 to December 2020 period: Ratio-to-Moving Averages yt/yt a. Calculate the Seasonal Index for every quarter. b. If the trend is described by the trend line T: = 1,000 + 30 t, what is the forecast for the fourth quarter of 202 1 ? Problem 3 Siena Ltd attempts to nd the trend of its sales over the past ve years. Siena is considerng which model that best represent the trends of its sales. Following are the result of linear and exponential model trend analysis: Variable Linear Trend Exponential Trend Intercept 0.2751 1 0426* 0.68 (0.00) (0.00) (0.00) 39 1.4282 0.0767 Notes: Parameter estimates are in the top part of the table with the p- values in parentheses; * represents signicance at the 5 percent level; Se is used in the forecast for the exponential trend. Linear trend 3.01 1.13 3.13 1.99 18.07 19.99 18.07 19.99 . Total _ 5.077 _ 8.315 a) Calculate the MSE and MAD for the linear trend model b) Calculate the MSE and MAD for the exponential trend model c) Which model that performs better
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