Consider the Following Time Series Representing Home Satellite Dish Installations

question 38

Essay

Consider the following time series representing home satellite dish installations by Big Boys Appliances over the past twelve months: $\begin{array}{lccccc}\text { Month }&\text { Installations }&\text { Month }&\text { Installations }&\text { Month }&\text { Installations }\\\text { January } & 14 & \text { May } & 22 & \text { Sept. } & 38 \\\text { February } & 19 & \text { June } & 29 & \text { October } & 30 \\\text { March } & 22 & \text { July } & 33 & \text { November } & 29 \\\text { April } & 25 & \text { August } & 35 & \text { December } & 42\end{array}$

A.Using linear regression, determine the forecast for the upcoming six months.
B.Using Holt's method, determine the forecast for the upcoming six months.Assume that a smoothing constant of .40 is used for the time series level and a smoothing constant of .20 is used for the
time series trend.
C..Which technique, linear regression or Holt's using the smoothing constants given in part B, gives the lower mean squared error?
D.Why should the result you found in part C not surprise you?

---

Definitions:

Economic Efficiency

A condition in which resources are allocated in such a way that maximizes the net benefit to society, ensuring that goods and services are produced and distributed in the most cost-effective manner.

Import Quotas

Limits set by a government on the quantity of a certain good that can be imported into a country, used to protect domestic industries.

Tariffs

A tax imposed by a government on goods and services imported from other countries, affecting the price and availability of those items.

Foreign-Produced Automobiles

Cars and other types of vehicles that are manufactured outside of a country's borders and then imported for sale.