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Forecasting Australian Wine Sales: Figure 6.15 shows time plots of monthly sales of six types of Australian wines (red, rose, sweet white, dry white,
Forecasting Australian Wine Sales: Figure 6.15 shows time plots of monthly sales of six types of Australian wines (red, rose, sweet white, dry white, sparkling, and fortified) for 1980- 1994. The data is available in Australian Wines.xls 10 The units are thousands of liters. You are hired to obtain short-term forecasts (2-3 months ahead) for each of the six series, and this task will be repeated monthly. (a) Which forecasting method would you choose if you had to choose the same method for all series? Why? (b) Fortified wine has the largest market share of the six types of wine considered. You are asked to focus on fortified wine sales alone and produce as accurate as possible fore- casts for the next 2 months. Start by partitioning the data using the period until December 1993 as the training period. Fit a regression model to sales with a linear trend and seasonality. i. Create the "actual vs. forecast" plot. What can you say about model fit? ii. Use the regression model to forecast sales in January and February 1994.
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