Consider the following sample data, consisting of 20 observations a Plot the above series and discuss the presence of random variations b Use the exponential smoothing method to make forecasts with 0 2 Compute the resulting MSE and MAD c Repeat the process with 0 4 d Use the appropriate value of to make a forecast for period 21 1 2345 678 910 12 9 12 6 11 1 14 8 11 9 12 9 12 1 13 6 11 9 9 0 11 12 13 14 15 16 17 18 19 20 8 9 9 3 13 3 10 7 13 5 15 1 11 3 13 6 12 4 13 0 Yt Yt

Question: Consider the following sample data, consisting of 20 observations. a. Plot the above series and discuss the presence of random variations. b. Use the exponential

Consider the following sample data, consisting of 20 observations.

a. Plot the above series and discuss the presence of random variations.
b. Use the exponential smoothing method to make forecasts with Î± = 0.2. Compute the resulting MSE and MAD.
c. Repeat the process with Î± = 0.4.
d. Use the appropriate value of Î± to make a forecast for period 21.

1 2345 678 910 12.9 12.6 11.1 14.8 11.9 12.9 12.1 13.6 11.9 9.0 11 12 13 14 15 16 17 18 19 20 8.9 9.3 13.3 10.7 13.5 15.1 11.3 13.6 12.4 13.0 Yt Yt

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