7.1 Data set books contains the daily sales of paperback and hardcover books at the same store. The task is to forecast the next four days' sales for paperback and hardcover books (data set books).

(a) Plot the series and discuss the main features of the data.

(b) Use simple exponential smoothing with the ses function (setting initial="simple") and explore different values of a for the paperback series. Record the within-sample SSE for the one-step forecasts. Plot SSE against a and find which value of a works best. What is the effect of a on the forecasts?

(c) Now let ses select the optimal value of

a. Use this value to generate forecasts for the next four days. Compare your results with (b).

(d) Repeat but with ini tial="optimal ". How much difference does an optimal initial level make?

(e) Repeat steps (b)-

(d) with the hardcover series.