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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Heath Co Industries, a producer of a line of skiwear, has been the subject of exercises in several earlier chapters of the text. The data for its sales and two potential causal variables, income (INCOME) and the northern-region unemployment rate (NRUR), are repeated in the following table:


a. Develop a multiple-regression model of SALES as a function of both INCOME and NRUR: SALES a b1(INCOME) b2(NRUR) Use this model to forecast sales for
2008Q1–2008Q4
(call your regression forecast series SFR), given that INCOME and NRUR for 2004 have been forecast to be:

b. Calculate the RMSE for your regression model for both the historical period (1998Q1–2007Q4) and the forecast horizon (2008Q1–2008Q4).

c. Now prepare a forecast through the historical period and the forecast horizon (2008Q1–2008Q4) using Winters’ exponential smoothing. Call this forecast series SFW, and fill in the RMSEs for SFW:

d.
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