Problem
For each problem, provide detail solution and written answers in a separate Excel tab. Your model must be stored in different tab to get full credit: Download the data from D2L for this problem. The data represent 2 years of monthly health insurance claims for a self-insured company
1. Use regression analysis to fit a linear trend model to the data set. Interpret R square of the model
2. Use regression analysis to fit a quadratic trend model to the data set. Interpret R square of the model
3. Compare the R square of models in question A and B and what is implied by this comparison?
4. Use Holt's method to create a model that minimizes the MSE for the data set. What are the optimal values of α and β
5. Use Holt-Winter's additive method to create seasonal model that minimizes the MSE for the data set. What are the optimal values of α, β, and ??
6. Use Holt-Winter's multiplicative method to create seasonal model that minimizes the MSE for the data set. What are the optimal values of α, β, and ??.
|
Year
|
Month
|
Period
|
Claims
|
|
2012
|
1
|
1
|
$10,159
|
|
|
2
|
2
|
$11,175
|
|
|
3
|
3
|
$12,310
|
|
|
4
|
4
|
$12,446
|
|
|
5
|
5
|
$13,213
|
|
|
6
|
6
|
$16,412
|
|
|
7
|
7
|
$17,405
|
|
|
8
|
8
|
$14,233
|
|
|
9
|
9
|
$14,606
|
|
|
10
|
10
|
$12,969
|
|
|
11
|
11
|
$13,980
|
|
|
12
|
12
|
$14,755
|
|
2013
|
1
|
13
|
$12,300
|
|
|
2
|
14
|
$13,224
|
|
|
3
|
15
|
$13,606
|
|
|
4
|
16
|
$13,659
|
|
|
5
|
17
|
$16,442
|
|
|
6
|
18
|
$17,334
|
|
|
7
|
19
|
$19,605
|
|
|
8
|
20
|
$18,997
|
|
|
9
|
21
|
$15,971
|
|
|
10
|
22
|
$15,740
|
|
|
11
|
23
|
$16,919
|
|
|
12
|
24
|
$18,931
|
|
2014
|
1
|
25
|
--
|
|
|
2
|
26
|
--
|
|
|
3
|
27
|
--
|
|
|
4
|
28
|
--
|
|
|
5
|
29
|
--
|
|
|
6
|
30
|
--
|