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Let the training and the validation sets comprise the period from January 2011 to December 2017 and January 2018 to July 2020, respectively.
a. Use the training set to estimate the linear trend model with seasonal dummy variables and compute the resulting MSE, MAD, and MAPE for the validation set.
b. Use the training set to estimate the exponential trend model with seasonal dummy variables and compute the resulting MSE, MAD, and MAPE for the validation set.
c. Determine the preferred model and estimate the entire data set to forecast new business incorporations August 2020.
d. Make scatter plot with the raw data. Comment on what the data shows over the period of January 2011 to December 2015. Comment on what the data shows over the period of January 2016 to July 2020.
Excel Data is as follows:
Date Incorporations
Jan-11 402
Feb-11 354
Mar-11 499
Apr-11 490
May-11 540
Jun-11 605
Jul-11 576
Aug-11 545
Sep-11 588
Oct-11 532
Nov-11 530
Dec-11 427
Jan-12 472
Feb-12 497
Mar-12 580
Apr-12 668
May-12 678
Jun-12 747
Jul-12 692
Aug-12 690
Sep-12 758
Oct-12 770
Nov-12 622
Dec-12 632
Jan-13 587
Feb-13 661
Mar-13 833
Apr-13 763
May-13 872
Jun-13 807
Jul-13 840
Aug-13 804
Sep-13 784
Oct-13 784
Nov-13 838
Dec-13 676
Jan-14 607
Feb-14 651
Mar-14 802
Apr-14 949
May-14 925
Jun-14 873
Jul-14 1010
Aug-14 862
Sep-14 942
Oct-14 920
Nov-14 758
Dec-14 734
Jan-15 730
Feb-15 619
Mar-15 797
Apr-15 1085
May-15 996
Jun-15 1123
Jul-15 1072
Aug-15 992
Sep-15 1116
Oct-15 909
Nov-15 899
Dec-15 781
Jan-16 743
Feb-16 841
Mar-16 907
Apr-16 1062
May-16 1050
Jun-16 1116
Jul-16 1152
Aug-16 1028
Sep-16 950
Oct-16 1145
Nov-16 878
Dec-16 865
Jan-17 823
Feb-17 878
Mar-17 971
Apr-17 1052
May-17 1060
Jun-17 1163
Jul-17 1123
Aug-17 1026
Sep-17 1044
Oct-17 1096
Nov-17 979
Dec-17 814
Jan-18 916
Feb-18 897
Mar-18 1072
Apr-18 1175
May-18 1237
Jun-18 1120
Jul-18 1119
Aug-18 1138
Sep-18 1097
Oct-18 1061
Nov-18 930
Dec-18 773
Jan-19 870
Feb-19 852
Mar-19 1018
Apr-19 1116
May-19 1175
Jun-19 1064
Jul-19 1063
Aug-19 1081
Sep-19 1042
Oct-19 1008
Nov-19 884
Dec-19 735
Jan-20 827
Feb-20 810
Mar-20 486
Apr-20 389
May-20 311
Jun-20 249
Jul-20 150