Question: Consider the data from Problem.
(a) Develop a sales forecast for each quarter in year 5 by using the multiplicative decomposition model.
(b) Repeat the computations by using an additive decomposition model.
(c) Which decomposition model is more accurate? Explain your answer.
Problem: Quarterly sales figures for the Cavill Pump Company, in thousands, for the past four years are shown in the following table:
(a) Forecast the demand for the first quarter of year 5 by using a four-period moving average model.
(b) What is the linear trend equation that best fits the data? Forecast the demand for the first quarter of year 5 by using this equation.
(c) Which method is more accurate?