The file P16_51.xlsx contains data on monthly U.S.

housing sales (in thousands of houses).

a. Use Winters’ method with


0.1 and


0.3 to forecast this series. Ask for 12 months of future forecasts. Then use Winters’ method a second time with the values of the smoothing constants that minimize RMSE.

b. Compare the two sets of outputs. How do they track the historical data? How do their future forecasts differ? Which of the two do you believe?

Skill-Extending Problems