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

Exercise 1

Using The Gap data, which are not adjusted to remove the seasonality, what exponential smoothing model do you think would be the most appropriate if you want to develop a quarterly forecast for 2004 sales? Explain why. Make a forecast for The Gap sales using the method you selected, and use the RMSE to evaluate your historic fit and your orecast accuracy for the four quarters of 2004. For the entire year of 2004, what percentage error is there in your forecast?