Question: Determine updated estimates of the slope, the intercept, and the seasonal factors for the end of Year 4 based on the observations given in Problem I. Using these updated estimates, determine the forecasts that Winters's method gives for all of Year 6 made at the end of Year 4. Use the values of the smoothing.
Problem I: Suppose the observed quarterly demand for Year 4 was 18, 51, 86, 66. Compare the accuracy of the forecasts obtained for the last three quarters of Year 4 in Problems II by computing both the MAD and the MSE.
Problem II: A popular brand of tennis shoe has had the following demand history by quarters over a three-year period.