For Exercises 13.46 to 13.49, see pages 693–694; for 13.50, see page 699; and for 13.51 and 13.52, see pages 705–706.

Question 13.51

13.51 Domestic average air fare.

The Bureau of Transportation Statistics conducts a quarterly survey to monitor domestic and international airfares.30 Here are the average airfares (inflation adjusted) for U.S. domestic flights for 2000 through 2013:

Year Airfare Year Airfare Year Airfare
2000 $463.56 2005 $370.63 2010 $363.51
2001 $426.27 2006 $384.30 2011 $381.14
2002 $409.97 2007 $369.25 2012 $385.00
2003 $404.36 2008 $379.86 2013 $385.97
2004 $381.84 2009 $341.27
  1. Hand calculate forecasts for the time series using an exponential smoothing model with . Provide a forecast for the average U.S. domestic airfare for 2014.
  2. Hand calculate forecasts for the time series using an exponential smoothing model with . Provide a forecast for the average U.S. domestic airfare for 2014.
  3. Write down the forecast equation for the 2015 average U.S. domestic airfare based on the exponential smoothing model with .

13.51

(a) and (b)

Year Airfare Forecast
 Forecast
2000 463.56 463.56 463.56
2001 426.27 463.56 463.56
2002 409.97 456.10 433.73
2003 404.36 446.88 414.72
2004 381.84 438.37 406.43
2005 370.63 427.07 386.76
2006 384.3 415.78 373.86
2007 369.25 409.48 382.21
2008 379.86 401.44 371.84
2009 341.27 397.12 378.26
2010 363.51 385.95 348.67
2011 381.14 381.46 360.54
2012 385 381.40 377.02
2013 385.97 382.12 383.40
2014 382.89 385.46

(c) .