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Forecasting _ More Practice questions_1

# Forecasting _ More Practice questions_1 - 1 Use exponential...

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1. Use exponential smoothing with α = 0.2 to calculate smoothed averages and a forecast for period 7 from the data below. Assume the forecast for the initial period is 7. Period Demand 1 10 2 8 3 7 4 10 5 12 6 9 Period Demand Forecast 1 10 7.0 2 8 7.6 3 7 7.7 4 10 7.5 5 12 8.0 6 9 8.8 2. A management analyst is using exponential smoothing to predict merchandise returns at an upscale branch of a department store chain. Given an actual number of returns of 154 items in the most recent period completed, a forecast of 172 items for that period, and a smoothing constant of 0.3, what is the forecast for the next period? How would the forecast be changed if the smoothing constant were 0.6? Explain the difference in terms of alpha and responsiveness. 166.6; 161.2 The larger the smoothing constant in an exponentially smoothed forecast, the more responsive the forecast. 3. What is the forecast for May based on a weighted moving average applied to the following past demand data and using the weights: 4, 3, 2 (largest weight is for most recent data)? Nov. Dec. Jan. Feb. Mar. April 37 36 40 42 47 43 2x42 + 3x47 + 4x43 = 84+141+172 = 397; 397/9 = 44.1 (note we divide by the sum of the weights; if the weights summed up to 1.0, the division step would not be required)

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4. Given the following data, calculate the three-year moving averages for years 4 through 10. Year Demand 1 74 2 90 3 59 4 91 5 140 6 98 7 110 8 123 9 99 Year Demand 3-Year Moving Ave. 1 74 2 90 3 59 4 91 74.33 5 140 80.00 6 98 96.67 7 110 109.67 8 123 116.00 9 99 110.33 110.67 5. Distinguish a dependent variable from an independent variable. The independent variable causes some behavior in the dependent variable; the dependent variable shows the effect of changes in the independent variable. (Associative forecasting methods: Regression and correlation, moderate) 6. Explain, in your own words, the meaning of the coefficient of determination.
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