OPERATIONS MANAGEMENT: FORECASTING PROBLEM

Please read the following instructions carefully.

·Read the problem statement for the cases VERY carefully.

·The report that you submit needs to be a single document – MS Word or Excel file.If you use Excel, please put each case on a separate tab/worksheet.

THIS IS A MASTERS LEVEL OPERATIONS MANAGEMENT COURSE.All steps must be thoroughly explained.Each case is like a report. Someone with little knowledge should be able to understand the answer because the answer should be like a lesson being taught.

Case-2:State Tax Revenue

One of the many sources of revenue in Texas is a state sales tax on certain types of goods and services.Data are compiled and the state comptroller’s office uses them to project future revenues, from this source, for the state budget.One particular category of goods is classified as Retail Trade.Four years of actual quarterly sales data for one particular area of north Texas is shown below.

A.Compute the seasonal indices for each quarter.

B.Choose an appropriate forecasting model and forecast sales for each of the four quarters of Year-5.State explicit justification for why the forecasting model that you have chosen is appropriate to use in this case.