The Consumer Price Index (CPI), which is published by the U. S. Bureau of Labor Statistics, is a measurement that reflects changes in consumer prices over time. The following data show the CPI over a 10- year period using 1982 as the base year with the CPI = 100. These data can also be found in the Excel file CPI.xlsx.

a. Forecast the CPI for 2013 using exponential smoothing with trend adjustment, and set α = 0.3 and β = 0.5.
b. Calculate the MAD for the forecast in part a.

Transcribed Image Text:

CPI Year 2003 184.0 2004 2005 2006 201.6 2007 207.3 CPI 2008 215.3 2009 214.5 2010 218.1 2011 224.9 2012 229.6 188.9 195.3