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Hillstone SA manufactures and sells tyres to the passenger vehicle market in southern Africa. The quarterly sales (in 1 000s of units) are shown in the table below. The marketing department wishes to apply time series analysis to estimate future quarterly passenger vehicle tyre sales for 2012 and 2013.
Year
Quarter
Tyressold
2005
Jan-Mar
64 876
Apr-Jun
58 987
Jul-Sep
54 621
Oct-Dec
62 345
2006
68 746
66 573
60 927
71 234
2007
78 788
71 237
68 098
74 444
2008
77 659
76 452
73 456
78 908
2009
84 563
81 243
74 878
86 756
2010
91 556
85 058
77 035
80 145
2011
102 923
96 456
(a) Use Excel to develop a time series model that Hillstone can use to prepare seasonally adjusted trend forecasts of passenger vehicle tyre sales on a quarterly basis.
(b) Prepare seasonally adjusted trend forecast estimates for 2012 and 2013 on a quarterly basis.
(c) What confidence could the Hillstone management have in the estimates produced? Comment briefly.
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