Blueberries are the most important fruit in Canada. Not only do they taste good, but they also occupy over half of the land area devoted to fruit production, with blueberry exports valued at several hundred million dollars per year. There are two main varieties of blueberries: small, wild berries that grow on low bushes and larger, juicer berries that grow on high bushes. British Columbia is famous for the high-bush variety and is the third-largest producing region in the world. Peaches, another delicious fruit, are grown in B.C.’s Okanagan Valley and in larger numbers in Ontario’s Niagara Peninsula, where the industry began in the early 1800s. By 1900 it had expanded to about 200,000 trees, and today Ontario boasts over a million peach trees.

Growers are supported by organizations such as the BC Blueberry Council and Foodland Ontario, a program of the Ontario Ministry of Agriculture. These organizations need to keep track of trends in the fruitgrowing industry and determine whether those trends can be expected to continue into the future.

The data file ch22_MCSP_Fruit contains the acreage planted in blueberries and peaches in British Columbia and Ontario, respectively, during the period 1996 to 2011. Forecast the acreage for one year and five years ahead for each of these crops in each of these provinces. Use linear regression first, and then correct your forecasts using exponential smoothing (with parameter a 5 0.2 and 0.8) on the residuals from the regression. Comment on the validity of each regression, and explain the role of exponential smoothing in addressing any problems in the regressions. Then comment on which of these methods is/are appropriate for each series, and give a final forecast using the method you consider appropriate for each forecast of each crop.