Year Month Claims Year Month Claims 2012 1 2013 1 2 2 3 $10,159 $11,175 $12,310 $12,446 $13,213 3 $12,300 $13,224 $13,60

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Year Month Claims Year Month Claims 2012 1 2013 1 2 2 3 10 159 11 175 12 310 12 446 13 213 3 12 300 13 224 13 60 1 (93.02 KiB) Viewed 59 times

Year Month Claims Year Month Claims 2012 1 2013 1 2 2 3 $10,159 $11,175 $12,310 $12,446 $13,213 3 $12,300 $13,224 $13,606 $13,659 $16,442 4 4 5 5 6 6 7 7 8 8 9 $16,412 $17,405 $14,233 $14,606 $12,969 $13,980 $14,755 9 $17,334 $19,605 $18,997 $15,971 $15,740 $16,919 $18,931 10 10 11 11 12 12 (a) Use trend-adjusted exponential smoothing method to predict the claims by using the optimal smoothing constants that minimize the mean squared error starting from month 2 in 2012. (b) What are the predictions for each of the first six months in 2014 using trend-adjusted exponential smoothing method? (c) As an alternative, a multiplicative decomposition model is proposed to predict the claims. Develop the seasonal indices for each month by use of the centered moving average method. (d) Deseasonalize the claims data by use of the seasonal indices from (c) to find the trend line equation. (e) From (C) and (d), compute the monthly predictions for the 2-year period and the mean squared error starting from month 2 in 2012.