a. Now apply Holt’s linear method to the paperback and hardback series and compute four-day forecasts in each case. b. Compare the RMSE measures of Holt’s method for the two series to those of simple...

a. Now apply Holt’s linear method to the paperback and hardback series and compute four-day forecasts in each case.

b. Compare the RMSE measures of Holt’s method for the two series to those of simple exponential smoothing in the previous question.

(Remember that Holt’s method is using one more parameter than SES.) Discuss the merits of the two forecasting methods for these data sets.

c. Compare the forecasts for the two series using both methods. Which do you think is best?

d. Calculate a 95% prediction interval for the rst forecast for each series, using the RMSE values and assuming normal errors. Compare your intervals with those produced using ses and holt.