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The following data represents the monthly sales in thousands of dollars for Mayfair Department Stores. Due to an unusually heavy amount of rain this summer
The following data represents the monthly sales in thousands of dollars for Mayfair Department Stores. Due to an unusually heavy amount of rain this summer the downtown region, where Mayfair is located, was closed due to flooding in June and July. Mayfair carries an insurance policy that will cover lost sales due to natural catastrophes. Month Year 1 Year 2 Year 3 June 170 180 195 July 180 205 210 August 205 215 230 September 230 245 280 October 240 265 290 November 315 330 390 December 360 400 420 January 290 335 330 February 240 260 290 March 240 270 295 April 230 255 280 May 195 220 250 a) Using linear trend what are the expected level of lost sales in June and July for Mayfair Department stores? b) Using seasonality without trend, (Multiplicative Seasonal Model) what are the adjusted lost sales for June and July? c) The insurance company for Mayfair Department Store Has offered to pay Mayfair $400,000 to cover total lost sales. Should Mayfair accept the offer or counteroffer with a different amount? If Mayfair makes a counteroffer, what amount should Mayfair request
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