Amazon.com has become one of the most successful online merchants. Two measures of its success are sales and net income/loss figures. They are given here.
a. Produce a time-series plot for these data. Specify the exponential forecasting model that should be used to obtain the following years’ forecasts.
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 13 using α = 0.10 and β = 0.20. Indicate the sales Amazon should expect for 2008 based on the forecast model.
d. Calculate the MAD for this model. |

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