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?