OM CH 4.8 Q - c) Which is better (using the mean absolute...

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Dell uses the CR5 chip in some of its laptop computers. The prices for the chip during the past 12 months were as follows: Month Price per Chip Month Price per Chip January $ 1.80 July 1.80 February 1.67 August 1.83 March 1.70 September 1.70 April 1.85 October 1.65 May 1.90 November 1.70 June 1.87 December 1.75 a) Use a 2-month moving average on all the data and plot the averages and the prices. b) Use a 3-month moving average and add the 3-month plot to the graph created in part (a).
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Unformatted text preview: c) Which is better (using the mean absolute deviation): the 2-month average or the 3-month average? d) Compute the forecasts for each month using exponential smoothing, with an initial forecast for January of $ 1.80. Use a= .1, then a=.3, and finally a= .5. Using MAD, which a is the best?...
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