A brokerage company is interested in forecasting the number of new accounts the office will obtain next month. It has collected the following data for the past 12 months:
MonthAccounts
1………………………….19
2………………………….20
3………………………….21
4………………………….25
5………………………….26
6………………………….24
7………………………….24
8………………………….21
9………………………….27
10…………………………30
11………………………...24
12………………………...30
a. Produce a time-series plot for these data. Specify the exponential forecasting model that should be used to obtain next month’s forecast.
b. Assuming a double exponential smoothing model, fit the least squares trend to the historical data, to determine the smoothed constant-process value and the smoothed trend value for period 0.
c. Produce the forecasts for periods 1 through 12 using α = 0.15, b = 0.25. Indicate the number of new accounts the company may expect to receive next month based on the forecast model.
d. Calculate the MAD for this model.