Lahore School of Economics

BSc IV
Time Series Analysis and Forecasting Spring 2020
Name:_____________________ Section:_______________
Date:______________________ Score:________________
Assignment No. 6

The table given below shows the quarterly sales for the Acme Tool Company. There might be trend in
these data. Use Holt’s exponential smoothing to develop forecasts using =0.4 and =0.3. The estimate
of the initial level may be set equal to the first observation. The initial trend value may be estimated to
equal zero. Also calculate MSE.

Year t Yt Lt Tt Y^ t + p et

2000 1 500
2 350
250
3
400
4
2001 5 450
6 350
200
7
300
8
2002 9 350
10 200
150
11
400
12
2003 13 550
14 350
250
15
550
16
2004 17 550
18 400
19 350
20 600
2005 21 750
22 500
23 400
24 650
2006 25 850