Introduction to Management Science 12th Edition by Bernard Taylor

Exercise 58

The River is a literary magazine published by the English Department at Tech. It has a 70-year history and enjoys an excellent reputation for providing a literary outlet for aspiring Appalachian writers in particular. However, its sales, mostly through independent bookstores and college libraries, have never been very large. Several years ago, the magazine's advisory board decided to create a Web site and post the bimonthly issues online for free access. Due to poor economic conditions and state budget cuts, Tech recently withdrew funding for the magazine, and in order to make up for this financial loss, the magazine's staff has decided to try to sell advertising (especially to local and regional businesses) on the magazine's Web site. In order to sell advertising, the magazine's staff would like to be able to provide potential advertisers with a forecast of the number of "visits" the Web site might receive in future months. Following is the number of monthly visits the Web site has received for the 24 months that it has existed:
Develop a linear trend line forecast, an exponential smoothing forecast (a = 0.60.), and a 3-month weighted moving average (with the most recent month weighted by 0.50, the next closest month by 0.30, and the final month by 0.20). Indicate which one you believe is the most accurate forecast model and the forecast for month 25.