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1. Monthly sales have been found to follow a linear trend of y = 9.82 + 4.372x, where y is the number of items sold and x is the number of the month. Monthly deviations from the trend have been calculated and follow an additive model. In month 24, the seasonal variation is estimated to be plus 8.5.
What is the forecast number of items to be sold in month 24? (to the nearest whole number.)
A.106
B.115
C.123
D.152 (2 marks)
2. Which TWO of the following are necessary if forecasts obtained from a time series analysis are to be reliable?
A. There must be no unforeseen events
B.The model used must fit the past data
C.The trend must be increasing
D.There must be no seasonal variation
