Table B.4 contains data on the annual U.S. production of blue and gorgonzola cheeses. a. Fit an ARIMA model to this time series, excluding the last 10 observations. Investigate model adequacy. Explain...

Table B.4 contains data on the annual U.S. production of blue and gorgonzola cheeses.

a. Fit an ARIMA model to this time series, excluding the last 10 observations. Investigate model adequacy. Explain how this model would be used for forecasting.

b. Forecast the last l 0 observations.

c. In Exercise 4.16, you were asked to use exponential smoothing methods to smooth the data, and to forecast the last 10 observations. Compare the ARIMA and exponential smoothing forecasts. Which forecasting method do you prefer?

d. How would prediction intervals be obtained for the ARIMA forecasts?

Exercise 4.16
Table B.4 contains data on the annual U.S. production of blue and gorgonzola cheeses. This data has a strong trend.

TABLE B.4

U.S. Production of Blue and Gorgonzola Cheeses