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?
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?
Foundations of Business (MindTap Course List)
6th Edition
ISBN:9781337386920
Author:William M. Pride, Robert J. Hughes, Jack R. Kapoor
Publisher:William M. Pride, Robert J. Hughes, Jack R. Kapoor
Chapter15: Using Management And Accounting Information
Section: Chapter Questions
Problem 5DQ
Related questions
Question
answer a & b
Transcribed Image Text:YEAR
DEPOSITS
GSP
YEAR
DEPOSITS
GSPb
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 S millions.
In S 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?
![.... 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 11, 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 19S3. 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'
GSP
YEAR
DEPOSITS'
GSP 1
1
.25
.4
13
.50
1.2
2
.24
.4
14
.95
1.2
3
.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
.32
1.7
20
1.9
3.9
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)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa0f103ee-3a9a-4bdf-b1ba-b1a4f6c1fd83%2Ff610b00d-0e97-4874-8189-0930cf4fe093%2Fijbw4_processed.png&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 11, 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 19S3. 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'
GSP
YEAR
DEPOSITS'
GSP 1
1
.25
.4
13
.50
1.2
2
.24
.4
14
.95
1.2
3
.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
.32
1.7
20
1.9
3.9
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)
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