solution

Softskin Inc. produces various products for improving and protecting sensitive skin. A trend adjusted smoothing model developed for quarterly revenues for Softskin is shown exhibit on the next page Using the information provided in the exhibit, answer the following questions.

A. Fill in the boxes of missing values in the exhibit. (5 pts). 1 pt. each (no partial credit)

B. Develop a forecast for the second quarter of 2014 (period 22) using a 5 quarter moving

average.

C. Develop a forecast for the second quarter of 2014 (period 22) using the two factor model in the exhibit

E. Using period 9 (Q1 2011) as a base period, calculate a tracking signal for period 12 (Q4 2011). What is your calculated MAD telling you about the model?

D. Using the years 2011 and 2012, calculate the bias. What is your calculated bias telling you about the model?