The number of auditing jobs performed by KK’s auditing firm in each of the
last nine months are listed below:
Month Jobs
September 353
October 387
November 342
December 374
January 396
February 409
March 399
April 412
May 408
Required:
KK firm feel that if June auditing jobs are more than 410, they should hire an
extra auditor. Should they if you:
(i) Assume a linear trend function. (8 marks)
(ii) Assume a three-month period weighted moving average with weights of
0.60, 0.30 and 0.10: (4 marks)
(iii) How does your forecast in (i) and (ii) compare? (2
marks)