Amazon.com has become one of the most successful online merchants. Two measures of its success are sales and net income/loss figures. They are given here.

Year Net Income/Loss Sales 1995 -0.3 0.5 1996 -5.7 15.7 1997 -27.5 147.7 1998 -124.5 609.8 1999 -719.9 1,639.8 2000 -1,411.2 2,761.9 2001 -567.3 3,122.9 2002 -149.1 3,933 2003 35.3 5,263.7 2004 588.5 6,921 2005 359 8,490 2006 190 10,711 2007 476 14,835

a. Produce a time-series plot for these data. Specify the exponential forecasting model that should be used to obtain the following years’ forecasts.

b. Assuming a double exponential smoothing model, fit the least squares trend to the historical data to determine the smoothed constant-process value and the smoothed trend value for period 0.

c. Produce the forecasts for periods 1 through 13 using a  0.10 and b  0.20. Indicate the sales Amazon should expect for 2008 based on the forecast model.

d. Calculate the MAD for this model.