Question

Using either Excel's Data Analysis/Solver Add-in or Excel QM for the following problem:

A major source of revenue in Texas is a state sales tax on certain types of goods and services. Data are com- piled, and the state comptroller uses them to project future revenues for the state budget. One particular category of goods is classified as Retail Trade. Four years of quarterly data (in $1,000,000s) for one particular area of southeast Texas follow:

QUARTER                  YEAR 1          YEAR 2          YEAR 3          YEAR 4

       1                               218                   225                234                   250

       2                               247                  254                265                   283

       3                               243                   255                264                   289

       4                               292                   299                327                   356

a) Compute a seasonal index for each quarter based on a CMA.

b) Deseasonalize the data, and develop a trend line on the deseasonalized data.

c) Use the trend line to forecast the sales for each quarter of year 5.

d) Use the seasonal indices to adjust the forecasts found in part (c) to obtain the final forecasts.

Answer 1