Question

A local bookstore recorded their revenue (in thousands) for the last 36 months starting in September, as provided below.

a. find the deseasonalized line of best fit

b. use the additive model of seasonal forecasting to predict the revenue for each month of the next academic year

c. use the multiplicative model of seasonal forecasting to predict the revenue for each month of the next academic year

d. what is the predicted total profit for the academic year for each method

		$1000s
Year	Month	Revenue
1	Sept	120
	Oct	100
	Nov	90
	Dec	80
	Jan	98
	Feb	90
	Mar	75
	Apr	60
	May	95
	Jun	91
	Jul	80
	Aug	78
2	Sep	125
	Oct	112
	Nov	92
	Dec	86
	Jan	106
	Feb	97
	Mar	93
	Apr	80
	May	105
	Jun	92
	Jul	87
	Aug	82
3	Sep	140
	Oct	125
	Nov	95
	Dec	94
	Jan	115
	Feb	107
	Mar	113
	Apr	102
	May	117
	Jun	96
	Jul	97
	Aug	87

Answer 1

a. find the deseasonalized line of best fit

Yt = 83.06 + 0.7686×t

b. use the additive model of seasonal forecasting to predict the revenue for each month of the next academic year

Period	Forecast
37	147.700
38	132.801
39	107.237
40	103.943
41	124.753
42	116.480
43	108.269
44	94.100
45	124.244
46	116.117
47	108.239
48	104.800

c. use the multiplicative model of seasonal forecasting to predict the revenue for each month of the next academic year

Period	Forecast
37	155.043
38	137.303
39	107.863
40	103.822
41	127.808
42	118.111
43	107.138
44	88.831
45	127.497
46	117.215
47	106.759
48	102.294

d. what is the predicted total profit for the academic year for each method

Accuracy Measures

MAPE	4.0095
MAD	3.7176
MSD	29.4554

Accuracy Measures

MAPE	4.1904
MAD	3.9170
MSD	33.4846