157hwk2+questions_f11

157hwk2+questions_f11 - Question 2 (18 pts) Time series...

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Question 2 (18 pts) Time series decomposition a. (12) Monthly data on US furniture and home furnishings sales are shown below, for the years 2008 and 2009. source: http://www.census.gov/retail/ Monthly Retail and Food Service sales, item category 442 not seasonally adjusted Use time series decomposition to forecast monthly sales for 2010, using both the multiplicative and additive models. Follow the steps and formating of the forecasting handout, page 1, to make your results easier for the readers to grade. Be sure to show your trend and seasonal components for full credit. 2008 2009 Jan 8,205 6,902 Feb 8,157 6,698 Mar 8,451 7,025 Apr 8,113 6,727 May 8,704 7,103 Jun 8,225 7,082 Jul 8,610 7,367 Aug 8,583 7,339 Sep 7,795 7,146 Oct 7,831 7,036 Nov 8,238 7,577 Dec 9,001 8,655 b. (6) Now, suppose that later you found out what actual 2010 furniture sales values were (as shown below) Evaluate your forecasts as shown on the last step of the example in the handout. Which model (multiplicative or additive) had a better fit, based on MSE? Which model (multiplicative or additive) had a better fit, based on MAD? Did either model show evidence of bias, and if so, was the bias positive (upward), or negative (downward?) 2010 Jan 6,525 Feb 6,684 Mar 7,531 Apr 6,980 May 7,194 Jun 7,168 Jul 7,519 Aug 7,611 Sep 7,357 Oct 7,026 Nov 7,872 Dec 8,762
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3. (10) Consider a factory that assembles radios.
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157hwk2+questions_f11 - Question 2 (18 pts) Time series...

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