Business Forecasting 6th Edition by Holton Wilson, Barry Keating, John Solutions

Exercise 4

Based on the plot of The Gap sales, on what you learned from question 3, as well as the information in Table 2.1, what forecasting methods might you suggest if you were to forecast The Gap's quarterly sales?
TABLE 2.1 A Guide to Selecting an Appropriate Forecasting Method*

question 3
Using data for 1985Q1 through 2007Q1, calculate the autocorrelation coefficients for The Gap's quarterly sales (the quarterly data are in Table 1.6 and in the C2Gap.xls data file) using twelve lags, and construct the corresponding correlogram (plot of the autocorrelations) for lags of 1 through 12. What do the autocorrelation coefficients and the correlogram tell you about the series?
Table 1.6


TABLE 1.6 The Gap Sales and a Modified Naïve Forecast (Forecast _ Sales[ _ 4]) (c1t6 f10) The Gap sales data are in thousands of dollars by quarter. The months indicated in the date columns represent the middle month in The
Gap's financial quarter. For example, the first quarter in its fiscal year includes February, March, and April.