Answered: DEMAND IN MEGAWATTS MONTH LAST YEAR…

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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Related questions

Question

CEO John Goodale, at Southern Illinois Power and Light,
has been collecting data on demand for electric power in its
western subregion for only the past 2 years. Those da ta are
shown in the ta ble below.
To plan for expansion and to arrange to borrow power
from neighboring utilities during peak periods, Goodale
needs to be able to forecast demand for each month next
year. However, the standard forecasting models discussed in
this chapter will not fit the data observed for the 2 years.
a) What are the weaknesses of the standard forecasting techniques
as applied to this set of data?
b) Because known models a re not appropriate here, propose
your own approach to forecasting. Although there is no
perfect solution to tackling data such as these (in other
words, there are no 100% right or wrong answers), justify your model.
c) Forecast demand for each month next year using the
model you propose.