Business finance forecasting with Excel

6. The following inventory pattern has been observed in the Zahm Corporation over 12 months:

Use both three-month and five-month moving-average models to forecast the inventory for the next January. Use root-mean-squared error (RMSE) to evaluate these two forecasts.

11. a. Plot the data presented in Exercise 7 to examine the possible existence of trend and seasonality in the data.

b. Prepare four separate smoothing models to examine the full-service restaurant sales data using the monthly data.

1. A simple smoothing model

2. Holt’s model

3. Winters’ model

c. Examine the accuracy of each model by calculating the root-mean-squared error for each during the historical period. Explain carefully what characteristics of the original data led one of these models to minimize the root-mean-squared error.

13. The data in the table below are for retail sales in book stores by quarter.

a. Plot these data and examine the plot. Does this view of the data suggest a particular smoothing model? Do the data appear to be seasonal? Explain.

b. Use a smoothing method to forecast the next four quarters. Plot the actual and forecast values.

**duplicate Figure 3.13