Assignment:
Suppose that you work for a U.S. senator who is contemplating writing a bill that would put a national sales tax in place. Because the tax would be levied on the sales revenue of retail stores, the senator has asked you to prepare a forecast of retail store sales for year 8, based on data from year 1 through year 7. The data are:
| Year |
Retail store sales |
| 1 |
$1,225 |
| 2 |
1285 |
| 3 |
1359 |
| 4 |
1392 |
| 5 |
1443 |
| 6 |
1474 |
| 7 |
1467 |
a. Use the first naive forecasting model presented in this chapter to prepare a forecast of retail store sales for each year from 2 through 8.
b. Prepare a time-series graph of the actual and forecast values of retail store sales for the entire period. (You will not have a forecast for year 1 or an actual value for year 8.)
c. Calculate the root-mean-squared error for your forecast series using the values for year 2 through year 7.
Your answer must be typed, double-spaced, Times New Roman font (size 12), one-inch margins on all sides, APA format and also include references.