Coco S. A. is considering diversifying and entering the housing market in the USA. They are only interested in a short-term investment. To help them with the decision and assess the market, their US analyst extracted a time series that covers US Months’ Supply of Houses For Sale at Current Sales Rate. The time series is not adjusted for seasonality and the data set reflects true market movements. Table 9.13 covers data from January 2004 to June 2008.

Analyse the data and produce a forecast. Pay specific attention to:

(a) Graphing the time series

(b) Deciding on the type of time series

(c) Using the best-suited method and producing forecasts until the end of 2008 (six time periods in the future)

(d) Measuring the quality of your forecast

(e) Deciding what would be your recommendations, from the data analysis point of view, to the company.

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2004 01 4.2 2004 2004 2004 2004 2004 2005 06 4 2004 2005 07 3.9 2004 08 4 2005 08 4.3 2004 09 4.4 2005 09 5 2004 10 4.1 2005 10 4.7 2004 11 5 2005 11 5.9 2004 12 5.2 Table 9.13 2005 2006 02 3.6 2005 2006 2005 2006 2005 2006 2005 05 3.7 2006 2006 2006 2006 2006 7 2007 09 9.9 2008 2006 10 7.5 2007 10 9 2008 2006 11 7.8 2007 11 11 2008 2006 12 7.6 2007 12 11 2008 888888 m m 03 3 04 3.5 05 3.3 01 02 06 3.7 07 4.2 88888888 03 4.8 04 mm 3.5 3.8 55 2005 12 5.9 01 88988 02 03 04 05 06 07 08 5.9 2007 6.1 09 59 5.8 2007 2007 5.1 2007 03 5.6 2007 04 5.5 2007 05 6.9 2008 05 6.9 2007 01 02 8 8.2 2008 01 11 10 2008 03 10 9 9 9 6.5 2007 8688 a aa 6.8 6.5 06 7.5 2008 02 08 8.9 2008 2008 07 8 2008 8888888 2008 04 06 07 08 09 10 11 12