Question

Suppose we have the following annual sales data for an automobile dealership:

Year                Sales                Trend

2009                121                     1

2010                187                     2

2011                165                     3

2012                134                     4

2013                155                     5

2014                167                     6

2015                200                     7

2016                206                     8

2017                221                    9

2018                231                 10

We want to forecast sales for 2019 and 2020 using either a simple trend model or a quadratic trend model. Use a within sample forecasting technique to determine the best model using the RMSE measure discussed in lecture. Once this model has been determined, provide actual forecasts for 2019 and 2020. Report the two RMSE values, along with the actual forecasts. Submit your Excel file used to create these answers.

Answer 1