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The following data list worldwide shipments of personal computers (in thousands) according to Dataquest.
Year Shipments (in '000)
1990.......... 23,738
1991.......... 26,966
1992.......... 32,411
1993.......... 38,851
1994.......... 47,894
1995.......... 60,171
1996........... 71,065
1997......... 82,400
1998......... 97,321
(a) Use exponential smoothing to determine the forecast of shipments for the year 1999. Use the actual shipments for 1990 as the starting forecast for 1991. Use a smoothing constant of α = 0.4.
2. Plot the data, fit a trend line, display equation and R2 on the chart and discuss the strength of prediction of the regression model. Note: Use X = 1 to represent Year 1990, X = 2 to represent Year 1991, and so on to get more accurate equation.
3. Use the regression model to predict the shipments for the years 1992 through 1999.
4. Which forecasting method would you prefer to use and why? Note: Compute MAPE for the two forecasting methods to compare the accuracy for the period 1992-1998.
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