Singapore is known to be a leading centre for ship repair, and its other key activities include building of marine vessels and offshore structures, vessel design and engineering and marine equipment and services. You have just joined a local bank as an analyst covering the international trade desk. You have been tasked to provide a forecast of vessel tonnage up to the year end of 2021.

Your supervisor has provided you with the monthly gross tonnage from July 2000 to June 2020. Your forecasted result will provide insights into the economic pulse of this sector which will have implications on the line of credit provided to businesses in this sector.

1. (a)Recommend an appropriate time series model to forecast the monthly gross tonnage up to December 2021 with justifications on the periods (i.e. whether you use all the data provided or only a part of it) and the forecasting model you decide to use. (You are not required to perform any forecasting here).
2. (20 marks)
3. (b)Determine the monthly forecast for gross tonnage up to December 2021. Show the steps in calculating the forecast.