Please consider this data table and answer the questions that follow : AVER

Please consider this data table and answer the questions that follow :

AVERAGE AIR FARES : 1995 Q1 TO 2010 Q3

YEAR_____QUARTER_____U.S. DOM. AVG. FARE

1995_____Q1___________$296.90

1995_____Q2___________$296.80

1995_____Q3___________$287.51

1995_____Q4___________$287.78

1996_____Q1___________$283.97

1996_____Q2___________$275.78

1996_____Q3___________$269.49

1996_____Q4___________$278.33

1997_____Q1___________$283.40

1997_____Q2___________$289.44

1997_____Q3___________$282.27

1997_____Q4___________$293.51

1998_____Q1___________$304.74

1998_____Q2___________$300.97

1998_____Q3___________$315.25

1998_____Q4___________$316.18

1999_____Q1___________$331.74

1999_____Q2___________$329.34

1999_____Q3___________$317.22

1999_____Q4___________$317.93

2000_____Q1___________$340.23

2000_____Q2___________$339.16

2000_____Q3___________$336.66

2000_____Q4___________$340.08

2001_____Q1___________$347.69

2001_____Q2___________$328.67

2001_____Q3___________$303.02

2001_____Q4___________$299.81

2002_____Q1___________$320.02

2002_____Q2___________$317.93

2002_____Q3___________$303.30

2002_____Q4___________$308.85

2003_____Q1___________$319.19

2003_____Q2___________$314.52

2003_____Q3___________$312.39

2003_____Q4___________$315.77

2004_____Q1___________$320.23

2004_____Q2___________$309.45

2004_____Q3___________$296.54

2004_____Q4___________$297.28

2005_____Q1___________$301.39

2005_____Q2___________$306.68

2005_____Q3___________$305.91

2005_____Q4___________$314.76

2006_____Q1___________$323.34

2006_____Q2___________$341.58

2006_____Q3___________$330.12

2006_____Q4___________$318.16

2007_____Q1___________$317.84

2007_____Q2___________$325.39

2007_____Q3___________$327.56

2007_____Q4___________$329.77

2008_____Q1___________$333.29

2008_____Q2___________$346.99

2008_____Q3___________$358.93

2008_____Q4___________$345.42

2009_____Q1___________$313.82

2009_____Q2___________$301.82

2009_____Q3___________$306.95

2009_____Q4___________$319.85

2010_____Q1___________$328.12

2010_____Q2___________$340.72

2010_____Q3___________$339.71

1. Plot the time-series data. Make sure the graph is labeled (i.e. title vertical axis etc.)

2. Compute the forecast for Q4 2010 using each of the following time series forecasting techniques :

a) 2-period moving average

b) 4-period moving average

c) Simple exponential smoothing. Use the naive approach to generate an initial forecast and a trial-and-error approach to compute alpha that minimizes MSE.

d) Trend line

e) Seasonalized Time Series Regression

3. Compute the MSE values for parts a) through d).

4. Which forecasting technique would you recommend? Justify your answer.