Barbara Lynch, the product manager for a line of skiwearproduced by HeathCo Industries, has been working on developingsales forecasts for the skiwear that is sold under the NorthernSlopes and Jacque Monri brands. She has had variousregression-based forecasting models developed. Quarterly sales for1988Q1 through 1997Q4 are as follows:
| Sales |
| Year | Q1 | Q2 | Q3 | Q4 |
| 1988 | 72,962 | 81,921 | 97,729 | 142,161 |
| 1989 | 145,592 | 117,129 | 114,159 | 151,402 |
| 1990 | 153,907 | 100,144 | 123,242 | 128,497 |
| 1991 | 176,076 | 180,440 | 162,665 | 220,818 |
| 1992 | 202,415 | 211,780 | 163,710 | 200,135 |
| 1993 | 174,200 | 182,556 | 198,990 | 243,700 |
| 1994 | 253,142 | 218,755 | 225,422 | 253,653 |
| 1995 | 257,156 | 202,568 | 224,482 | 229,879 |
| 1996 | 289,321 | 266,095 | 262,938 | 322,052 |
| 1997 | 313,769 | 315,011 | 264,939 | 301,479 |
a) Prepare a time-series plot of the data, and on the basis ofwhat you see in the plot, write a brief paragraph in which youexplain what patterns you think are present in the salesseries.
b) Smooth out seasonal influences and irregular movement bycalculating the center moving averages. Add the centered movingaverages to the original data you plotted in part a. Has theprocess of calculating center moving averages been effective insmoothing out the seasonal and irregular fluctuations in the data?Explain.
c) Determine the degree of seasonality by calculating seasonalindexes for each quarter of the year.
d) Develop a forecast for Ms Lynch for the four quarters of1998.
