The file Auditors contains the number of audits of corporations with assets of more than $250 million conducted by the Internal Revenue Service. (Data extracted from K. McCoy, 'TRS Audits Big Firms Less Often," USA Today, April 15, 2010, p. IB; and Internal Revenue Service, www.irs.gov.)
a. Plot the data.
b. Fit a three-year moving average to the data and plot the results.
c. Using a smoothing coefficient of W = 0.50, exponentially smooth the series and plot the results.
d. What is your exponentially smoothed forecast for 2012?
e. Repeat (c) and (d), using a smoothing coefficient of W = 0.25.
f. Compare the results of (d) and (e).