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Time Series Analysis and Forecast

Consider the airline ticket data in the file P13_01.xlsx.

a. Create a time series chart of the data. Based on what you see, which of the exponential smoothing models do you think should be used for forecasting? Why?

b. Use simple exponential smoothing to forecast these data, using no holdout period and requesting 12 months of future forecasts. Use the default smoothing constant of 0.1.

c. Repeat part b, optimizing the smoothing constant. Does it make much of an improvement?

d. Write a short report to summarize your results.



Solution Preview

Please refer to the attachments.

Time Series Analysis Chart - shows a periodically increasing and decreasing pattern in the data set. When this data is plotted month-wise, in Time Series Analysis Chart - II, a single regular distribution pattern in the data is observed for each of the four years. Thus, we conclude that the data exhibits a ...

Solution Summary

This solution is comprised of detailed analysis and step-by-step calculations of various Forecast Techniques like Exponentially Smoothed Forecast, Optimization of Smoothing Constant etc. in EXCEL. The solution provides students with a clear perspective of the given problems and the related aspects of forecast analysis.