Question

Problem 1:

Quarterly billing for water usage is shown below.

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Quarter	Year 1	Year 2	Year 3	Year 4	Year 5
1	33	42	54	70	85
2	36	40	53	67	82
3	35	42	54	70	87
4	38	47	62	77	99

1. Construct a time series plot. What type of pattern exists in the data?
2. Explain which forecasting tool is best fit for this kind of data.
3. Forecast the Q3 of Year 5
4. Forecast the Q2 of Year 7

Answer 1

The time series plot is:

There is a vertical upward pattern being followed.

A trend forecasting tool is best fit for this kind of data.

Forecast the Q3 of Year 5 = 86.82

Forecast the Q2 of Year 7 = 110.01

Period	Demand (y)	Period(x)
Period 1	33	1
Period 2	36	2
Period 3	35	3
Period 4	38	4
Period 5	42	5
Period 6	40	6
Period 7	42	7
Period 8	47	8
Period 9	54	9
Period 10	53	10
Period 11	54	11
Period 12	62	12
Period 13	70	13
Period 14	67	14
Period 15	70	15
Period 16	77	16
Period 17	85	17
Period 18	82	18
Period 19	87	19
Period 20	99	20
Intercept	23.86
Slope	3.31
Forecast	86.82	19
	110.01	26