Problem

Shampoo Sales. The file ShampooSales.csv contains data on the monthly sales of a certain shampoo over a 3-year period. Source: Hyndman, R.J., Time Series Data Library.

a. Create a well-formatted time plot of the data.

b. Which of the four components (level, trend, seasonality, noise) seem to be present in this series?

c. Do you expect to see seasonality in sales of shampoo? Why?

d. If the goal is forecasting sales in future months, which of the following steps should be taken?

• Partition the data into training and validation sets

• Tweak the model parameters to obtain good fit to the validation data

• Look at MAPE and RMSE values for the training set

• Look at MAPE and RMSE values for the validation set.