Case Study:
South Pole Ice Cream Company
Month sales (x $100.000) of the South Pole Cream Company are shown in the following table.
Month 2005 2006 2007
Jan. 2.30 2.65 3.30
Feb. 2.60 2.80 3.60
Mar. 2.70 3.00 3.60
April 2.85 3.20 4.20
May 3.25 3.85 4.20
June 3.30 3.90 5.00
July 3.25 3.80 -
Aug. 3.35 3.90 -
Sept. 3.20 3.60 -
Oct. 3.10 3.55 -
Nov. 2.75 3.30 -
Dec. 2.65 3.20 -
1. Plot the data on a graph with time on the horizontal axis and sales (in hundred thousands ) on the vertical axis.
2. Fit a linear trend equation to the data using the least-squares method. (Note: This Calculation can be made using either a calculator or a computer.)
3. Base on your answers to Question 2, forecast (seasonal unadjusted) sales for each of the last six months of 2007.
4. Calculate seasonally adjusted monthly sales by the ratio-to trend method for the last six months of 2007.