(Winter’s Model) At the end of 2014, assume the following current value of the estimates of level and trend and seasonal factors for four quarters (seasons) in the year: Level = 48.34, trend =0.5625, Season 1 = 0.33, Season 2 = 0.83, Season 3 = 1.66, Season 4= 1.16.

(a) Assume that the observed demand for the first quarter (season 1) of 2015 is 18. Using α= 0.2, β = 0.15, and γ = 0.10, update the estimates of the level, the trend, and the seasonal factors.

(b) What are the forecasts made at the end of the first quarter of 2015 for the remaining three quarters of 2015?

(c) Suppose the observed quarterly demand for 2015 turns out to be 18, 51, 86, 66 (listed from quarter 1 to 4).

Determine, the updated level, trend and seasonal factor estimates at the end of 2015, and the forecast for all four quarters in 2016 at the end of 2015.