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Housing starts 22859 24001 25140 25812 25253 24736
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a. Construct a time series plot of housing starts. Do you see a pattern in the data?
b. Use exponential smoothing with α=0.4 to develop a forecast of housing starts for the first quarter of 2012.
c. Compute the accuracy of your forecast using all three measures discussed in the class?
d. Applying the forecast accuracy measures, would you prefer a smoothing constant of α=0.2, α=0.3, or α=0.4 for the housing start time series? Are the conclusions the same regardless of the choice of the forecast accuracy measure?
e. Compute four-quarter and five-quarter moving averages for the housing starts time series.
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