1. The following is the yearly coffee production (in coded units) of a certain country from 2013 to 2021. Year 2013 2014 2015 2016 2017 2018 2019 2020 2021 t 1 2 3 4 5 6 7 8 9 21 31 29 32 16 Y 27 25 37 43 It is felt that the data can be fitted by the linear trend model, Y₁ = a + 3t+, where ~ NID(0,0²) and 3 > 0. (1) Here, ~ NID(0, 1) means ~ N(0, 1) for each t, and {e} are independent of each other at different times. (a) Find the least square estimates of a and 3, and forecast the value of 2022. [ (b) Instead of using least square estimate, it is suggested to use the Simple Expo- nential Smoothing (SES) method with exponential smoothing constant a = 0.1 and the initial forecast So = y₁ to construct 1-step ahead forecasts for the data, i.e. St = 0.1Y+0.9St-1- i. Calculate the one-step ahead forecast for the year 2015-2018. ii. Do you think SES overestimates or underestimates the model (1)? Briefly explain. iii. What do you suggest to improve the forecast and why?
1. The following is the yearly coffee production (in coded units) of a certain country from 2013 to 2021. Year 2013 2014 2015 2016 2017 2018 2019 2020 2021 t 1 2 3 4 5 6 7 8 9 21 31 29 32 16 Y 27 25 37 43 It is felt that the data can be fitted by the linear trend model, Y₁ = a + 3t+, where ~ NID(0,0²) and 3 > 0. (1) Here, ~ NID(0, 1) means ~ N(0, 1) for each t, and {e} are independent of each other at different times. (a) Find the least square estimates of a and 3, and forecast the value of 2022. [ (b) Instead of using least square estimate, it is suggested to use the Simple Expo- nential Smoothing (SES) method with exponential smoothing constant a = 0.1 and the initial forecast So = y₁ to construct 1-step ahead forecasts for the data, i.e. St = 0.1Y+0.9St-1- i. Calculate the one-step ahead forecast for the year 2015-2018. ii. Do you think SES overestimates or underestimates the model (1)? Briefly explain. iii. What do you suggest to improve the forecast and why?
Calculus For The Life Sciences
2nd Edition
ISBN:9780321964038
Author:GREENWELL, Raymond N., RITCHEY, Nathan P., Lial, Margaret L.
Publisher:GREENWELL, Raymond N., RITCHEY, Nathan P., Lial, Margaret L.
Chapter1: Functions
Section1.2: The Least Square Line
Problem 7E
Related questions
Question
![1. The following is the yearly coffee production (in coded units) of a certain country
from 2013 to 2021.
Year 2013 2014 2015 2016 2017 2018 2019 2020 2021
t
1
2
5 6 7
8 9
3 4
27 25 31 29
16 21
32
37
43
It is felt that the data can be fitted by the linear trend model,
Yt
Y₁ = a + 3t+ , where ~ NID(0,0²) and 3 > 0.
EN
Here, NID(0, 1) means ~
EN
other at different times.
(1)
N(0, 1) for each t, and {e} are independent of each
(a) Find the least square estimates of a and 6, and forecast the value of 2022. [ 1
(b) Instead of using least square estimate, it is suggested to use the Simple Expo-
nential Smoothing (SES) method with exponential smoothing constant a = 0.1
and the initial forecast So = y₁ to construct 1-step ahead forecasts for the data,
i.e.
St = 0.1Y+0.9.St-1.
i. Calculate the one-step ahead forecast for the year 2015-2018.
ii. Do you think SES overestimates or underestimates the model (1)? Briefly
explain.
iii. What do you suggest to improve the forecast and why?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff270a057-74c3-4dcb-bc49-7083cb266e44%2F7ae2723f-a8cf-4446-85ee-79b0a9c623df%2Ffp6w6v_processed.jpeg&w=3840&q=75)
Transcribed Image Text:1. The following is the yearly coffee production (in coded units) of a certain country
from 2013 to 2021.
Year 2013 2014 2015 2016 2017 2018 2019 2020 2021
t
1
2
5 6 7
8 9
3 4
27 25 31 29
16 21
32
37
43
It is felt that the data can be fitted by the linear trend model,
Yt
Y₁ = a + 3t+ , where ~ NID(0,0²) and 3 > 0.
EN
Here, NID(0, 1) means ~
EN
other at different times.
(1)
N(0, 1) for each t, and {e} are independent of each
(a) Find the least square estimates of a and 6, and forecast the value of 2022. [ 1
(b) Instead of using least square estimate, it is suggested to use the Simple Expo-
nential Smoothing (SES) method with exponential smoothing constant a = 0.1
and the initial forecast So = y₁ to construct 1-step ahead forecasts for the data,
i.e.
St = 0.1Y+0.9.St-1.
i. Calculate the one-step ahead forecast for the year 2015-2018.
ii. Do you think SES overestimates or underestimates the model (1)? Briefly
explain.
iii. What do you suggest to improve the forecast and why?
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Recommended textbooks for you
![Calculus For The Life Sciences](https://www.bartleby.com/isbn_cover_images/9780321964038/9780321964038_smallCoverImage.gif)
Calculus For The Life Sciences
Calculus
ISBN:
9780321964038
Author:
GREENWELL, Raymond N., RITCHEY, Nathan P., Lial, Margaret L.
Publisher:
Pearson Addison Wesley,
![Glencoe Algebra 1, Student Edition, 9780079039897…](https://www.bartleby.com/isbn_cover_images/9780079039897/9780079039897_smallCoverImage.jpg)
Glencoe Algebra 1, Student Edition, 9780079039897…
Algebra
ISBN:
9780079039897
Author:
Carter
Publisher:
McGraw Hill
![Big Ideas Math A Bridge To Success Algebra 1: Stu…](https://www.bartleby.com/isbn_cover_images/9781680331141/9781680331141_smallCoverImage.jpg)
Big Ideas Math A Bridge To Success Algebra 1: Stu…
Algebra
ISBN:
9781680331141
Author:
HOUGHTON MIFFLIN HARCOURT
Publisher:
Houghton Mifflin Harcourt
![Calculus For The Life Sciences](https://www.bartleby.com/isbn_cover_images/9780321964038/9780321964038_smallCoverImage.gif)
Calculus For The Life Sciences
Calculus
ISBN:
9780321964038
Author:
GREENWELL, Raymond N., RITCHEY, Nathan P., Lial, Margaret L.
Publisher:
Pearson Addison Wesley,
![Glencoe Algebra 1, Student Edition, 9780079039897…](https://www.bartleby.com/isbn_cover_images/9780079039897/9780079039897_smallCoverImage.jpg)
Glencoe Algebra 1, Student Edition, 9780079039897…
Algebra
ISBN:
9780079039897
Author:
Carter
Publisher:
McGraw Hill
![Big Ideas Math A Bridge To Success Algebra 1: Stu…](https://www.bartleby.com/isbn_cover_images/9781680331141/9781680331141_smallCoverImage.jpg)
Big Ideas Math A Bridge To Success Algebra 1: Stu…
Algebra
ISBN:
9781680331141
Author:
HOUGHTON MIFFLIN HARCOURT
Publisher:
Houghton Mifflin Harcourt
![College Algebra](https://www.bartleby.com/isbn_cover_images/9781337282291/9781337282291_smallCoverImage.gif)
![Trigonometry (MindTap Course List)](https://www.bartleby.com/isbn_cover_images/9781337278461/9781337278461_smallCoverImage.gif)
Trigonometry (MindTap Course List)
Trigonometry
ISBN:
9781337278461
Author:
Ron Larson
Publisher:
Cengage Learning
![Holt Mcdougal Larson Pre-algebra: Student Edition…](https://www.bartleby.com/isbn_cover_images/9780547587776/9780547587776_smallCoverImage.jpg)
Holt Mcdougal Larson Pre-algebra: Student Edition…
Algebra
ISBN:
9780547587776
Author:
HOLT MCDOUGAL
Publisher:
HOLT MCDOUGAL