Question
The following data contains the monthly number of airlines tickets sold by a travel agency for four years. Month Year Tickets January 1 605 February
The following data contains the monthly number of airlines tickets sold by a travel agency for four years.
Month | Year | Tickets |
January | 1 | 605 |
February | 1 | 647 |
March | 1 | 636 |
April | 1 | 612 |
May | 1 | 714 |
June | 1 | 765 |
July | 1 | 698 |
August | 1 | 615 |
September | 1 | 588 |
October | 1 | 685 |
November | 1 | 711 |
December | 1 | 664 |
January | 2 | 630 |
February | 2 | 696 |
March | 2 | 670 |
April | 2 | 671 |
May | 2 | 724 |
June | 2 | 787 |
July | 2 | 724 |
August | 2 | 651 |
September | 2 | 589 |
October | 2 | 697 |
November | 2 | 750 |
December | 2 | 705 |
January | 3 | 664 |
February | 3 | 704 |
March | 3 | 691 |
April | 3 | 672 |
May | 3 | 753 |
June | 3 | 787 |
July | 3 | 751 |
August | 3 | 695 |
September | 3 | 643 |
October | 3 | 724 |
November | 3 | 803 |
December | 3 | 705 |
January | 4 | 720 |
February | 4 | 757 |
March | 4 | 707 |
April | 4 | 692 |
May | 4 | 828 |
June | 4 | 827 |
July | 4 | 763 |
August | 4 | 710 |
September | 4 | 673 |
October | 4 | 793 |
November | 4 | 852 |
December | 4 | 710 |
Our goal is to build a regression model to predict the demand for the following 12 months.
a) (2 pts) Does a linear trend appear to fit these data well? Explain why or why not. Reference any tables/figures that you need to make your point.
b) (5+2+2 = 9 pts) Build a linear trend model or nonlinear trend regression model (depending on your answer in part a). Do not add a seasonality factor to this model. To validate your model, use the last 12 months as a validation data set.
- Copy and paste your R code and display the regression output.
- What are the RMSE and MAPE of the trend model based on the validation data? Discuss the overall performance of you model.
- Fill in the table with your predictions for the following 12 months.
Month | Year | Tickets (Prediction) |
January | 5 | |
February | 5 | |
March | 5 | |
April | 5 | |
May | 5 | |
June | 5 | |
July | 5 | |
August | 5 | |
September | 5 | |
October | 5 | |
November | 5 | |
December | 5 |
c) (2 pts) Is there evidence of some seasonal pattern in the sales data? If so, characterize the seasonal pattern (monthly, quarterly, or yearly).
d) (5+2+2= 9 pts) Build a regression model with trend and seasonality. To validate your model, use the last 12 months as a validation data set.
- Copy and paste your R code and display the regression output.
- What are the RMSE and MAPE of the trend model based on the validation data? Discuss the overall performance of you model.
- Fill in the table with your predictions for the following 12 months.
Month | Year | Tickets (Prediction) |
January | 5 | |
February | 5 | |
March | 5 | |
April | 5 | |
May | 5 | |
June | 5 | |
July | 5 | |
August | 5 | |
September | 5 | |
October | 5 | |
November | 5 | |
December | 5 |
e) (3 pts) Between the two models (part b and part d), which model will you use? Explain your answer.
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