a) Using exponential smoothing, with a = .6, then trend analysis, and finally linear regression, discuss which forecasting model fits best for Boulanger's strategic plan. Justify the selection of one model over another. b) Carefully examine the data. Can you make a case for exclud- ing a portion of the information? Why? Would that change your choice of model? PX
a) Using exponential smoothing, with a = .6, then trend analysis, and finally linear regression, discuss which forecasting model fits best for Boulanger's strategic plan. Justify the selection of one model over another. b) Carefully examine the data. Can you make a case for exclud- ing a portion of the information? Why? Would that change your choice of model? PX
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Question
![•..• 4.34 Boulanger Savings and Loan is proud of its long tra-
dition in Winter Park, Florida. Begun by Michelle Boulanger
22 years after World War II, the S&L has bucked the trend of
financial and liquidity problems that has repeatedly plagued
the industry. Deposits have increased slowly but surely over the
years, despite recessions in 1983, 1988, 1991, 2001, and 2010. Ms.
Boulanger believes it is necessary to have a long-range strategic
plan for her firm, including a 1-year forecast and preferably even
a 5-year forecast of deposits. She examines the past deposit data
and also peruses Florida's gross state product (GSP) over the same
44 years. (GSP is analogous to gross national product [GNP] but
on the state level.) The resulting data are in the following table.
YEAR
DEPOSITS?
GSPb
YEAR
DEPOSITS?
GSpb
1
.25
.4
13
.50
1.2
.24
.4
14
.95
1.2
.24
.5
15
1.70
1.2
4
.26
.7
16
2.3
1.6
.25
.9
17
2.8
1.5
.30
1.0
18
2.8
1.6
7
.31
1.4
19
2.7
1.7
8
.32
1.7
20
3.9
1.9
9.
.24
1.3
21
4.9
1.9
10
.26
1.2
22
5.3
2.3
11
.25
1.1
23
6.2
2.5
12
.33
.9
24
4.1
2.8
(continued)
io io](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F374ac5e2-00e9-4eba-82e6-f84ec5ed28e5%2F016f16f6-314e-4ed3-ac91-471f2f33819a%2Fi3wlej_processed.jpeg&w=3840&q=75)
Transcribed Image Text:•..• 4.34 Boulanger Savings and Loan is proud of its long tra-
dition in Winter Park, Florida. Begun by Michelle Boulanger
22 years after World War II, the S&L has bucked the trend of
financial and liquidity problems that has repeatedly plagued
the industry. Deposits have increased slowly but surely over the
years, despite recessions in 1983, 1988, 1991, 2001, and 2010. Ms.
Boulanger believes it is necessary to have a long-range strategic
plan for her firm, including a 1-year forecast and preferably even
a 5-year forecast of deposits. She examines the past deposit data
and also peruses Florida's gross state product (GSP) over the same
44 years. (GSP is analogous to gross national product [GNP] but
on the state level.) The resulting data are in the following table.
YEAR
DEPOSITS?
GSPb
YEAR
DEPOSITS?
GSpb
1
.25
.4
13
.50
1.2
.24
.4
14
.95
1.2
.24
.5
15
1.70
1.2
4
.26
.7
16
2.3
1.6
.25
.9
17
2.8
1.5
.30
1.0
18
2.8
1.6
7
.31
1.4
19
2.7
1.7
8
.32
1.7
20
3.9
1.9
9.
.24
1.3
21
4.9
1.9
10
.26
1.2
22
5.3
2.3
11
.25
1.1
23
6.2
2.5
12
.33
.9
24
4.1
2.8
(continued)
io io
Transcribed Image Text:YEAR
DEPOSITS
GSP6
YEAR
DEPOSITSa
GSP6
25
4.5
2.9
35
31.1
4.1
26
6.1
3.4
36
31.7
4.1
27
7.7
3.8
37
38.5
4.0
28
10.1
4.1
38
47.9
4.5
29
15.2
4.0
39
49.1
4.6
30
18.1
4.0
40
55.8
4.5
31
24.1
3.9
41
70.1
4.6
32
25.6
3.8
42
70.9
4.6
33
30.3
3.8
43
79.1
4.7
34
36.0
3.7
44
94.0
5.0
a In $ millions.
b In $ billions.
a) Using exponential smoothing, with a = .6, then trend analysis,
and finally linear regression, discuss which forecasting model
fits best for Boulanger's strategic plan. Justify the selection of
one model over another.
b) Carefully examine the data. Can you make a case for exclud-
ing a portion of the information? Why? Would that change
your choice of model? PX
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