Description

INSTRUCTIONS

• The homework will be peer-graded. In analytics modeling, there are often lots of different approaches that work well, and I want you to see not just your own, but also others.
• The homework grading scale reflects the fact that the primary purpose of homework is learning:

Rating Meaning Point value (out of 100)
4 All correct (perhaps except a few details) with a deeper solution than expected 100
3 Most or all correct 90
2 Not correct, but a reasonable attempt 75
1 Not correct, insufficient effort 50
0 Not submitted 0

Question 7.1

Describe a situation or problem from your job, everyday life, current events, etc., for which exponential smoothing would be appropriate. What data would you need? Would you expect the value of  (the first smoothing parameter) to be closer to 0 or 1, and why?

Question 7.2

Note: in R, you can use either HoltWinters (simpler to use) or the smooth package’s es function (harder to use, but more general). If you use es, the Holt-Winters model uses model=”AAM” in the function call (the first and second constants are used “A”dditively, and the third (seasonality) is used “M”ultiplicatively; the documentation doesn’t make that clear).