Retail Forward, Inc., is a global management consulting and market research firm specializing in retail intelligence and strategies. One of its press releases (June Consumer Outlook: Spending Plans Show Resilience , June 1, 2006) divulged the result of the Retail Forward ShopperScape„¢ survey conducted each month from a sample of 4,000 U.S. primary household shoppers. A measure of consumer spending is represented by the following figure:

a. Construct a time-series plot of these data. Does it appear that a linear trend exists in the time series?
b. Calculate forecasts for each of the months in the time series. Use a smoothing constant of 0.25.
c. Calculate the MAD value for the forecasts you generated in part b.
d. Construct a single exponential smoothing forecast for July 2006. Use a smoothing constant of 0.25.

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Retail Forward Future Spending Index TM (December 2005 = 100) 110 107.5 105 101.6 101.3 99.7 99.6 95.9 94.0 95 90 Jun JulAug- Sep- Oct Nov- Dec Jan- Feb- Mar- Apr May- Jun- 05 05 05 05 05 05 05 06 06 06 06 06 06