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Question

(a) Use moving average with three periods to compute the monthly revenue for months 1through 12 of

2013.

(b) calculate MAD for the model in a

(c) Use a weighted moving average with three periods to compute the monthly revenue formonths 1 through 12 of 2013. Use 3, 2, and 1 for the weights of the most recent, second most recent, and third most recent periods, respectively.

(d) calculate MAD for the model in c

(e) Use a weighted moving average with three periods to compute the monthly revenue formonths 1 through 12 of 2013. . Use 2, 2, and 1 for the weights of the most recent, second most recent, and third most recent periods, respectively.

(f) calculate MAD for the model in e

(g) Use the exponential smoothing method to compute the monthly revenue for months 1through 12 of 2013. Remember for smoothing that the equation is Ft+1=Ft+α*(Yt-Ft).  The key was on the right side of the equation, first and last term in the calculation are the same. For this problem, use alpha=.3. For the first month, presume the forecast was 450.

(h) calculate the MAD for the model in g

(i) compare b, d, and f and h, which model is the best?

(j) calculate the forecast of revenue for January 2014 by using the best model decided in g. Home Work Problem
Forecasting
Moving Average, Wighted Moving Average and Exponential
Data
Alpha:
Moving Average
Weighted Average (3,2, 1)
Weighted Average (2,2, 1)
Exponential (a=.3)
Period
Revenue
|Wgt 1
Wgt2
Forecast
Error
Absolute
Forecast
Error
Absolute
Forecast
Error
Absolute
Forecast
Error
Absolute
12-Oct
12-Nov
12-Dec
13-Jan
13-Feb
13-Mar
13-Apr
13-May
13-Jun
13-Jul
13-Aug
13-Sep
13-Oct
13-Nov
13-Dec
Total
Total
Total
Total
Average
Average
Average
Average

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