Question 1 contains the actual values for 12 periods (listed in order, 1-12). In

Question

Question 1 contains the actual values for 12 periods (listed in order, 1-12). In Excel, create forecasts for periods 6-13 using each of the following methods: 5 period simple moving average; 4 period weighted moving average (0.63, 0.26, 0.08, 0.03); exponential smoothing (alpha = 0.23 and the forecast for period 5 = 53); linear regression with the equation based on all 12 periods; and quadratic regression with the equation based on all 12 periods. Round all numerical answers to two decimal places.

Q1: The actual values for 12 periods (shown in order) are: (1) 45  (2) 52 (3) 48 (4) 59  (5) 55  (6) 54  (7) 64  (8) 59  (9) 72  (10) 66  (11) 64  (12) 78

Using a 5 period simple moving average, the forecast for period 13 will be:

Q2: Using the 4 period weighted moving average, the forecast for period 13 will be:

Q3: With exponential smoothing, the forecast for period 13 will be:

Q4: With linear regression, the forecast for period 13 will be:

Q5: With quadratic regression, the forecast for period 13 will be:

Q6: Considering only the forecasts for period 6-12, what is the lowest MAD value for any of the methods?

Explanation / Answer

For linear regression

Y= a+bX where a and b are estiamted by excel

For quadratic regression

Y =a+bX+ cX2 where a,b and c are estiamted by excel

Linear regression is the lowest MAD value for any of the methods

Periods Value 5 period SMA 4 period WMA exponential smoothing Linear quadratic 1 45 45 a=44.12 a=45 2 52 45 b=2.39 b=2.0149 3 48 46.61 c=0.02897 4 59 46.9297 5 55 47.48 49.70587 6 54 51.8 51.61 50.92352 7 64 53.6 51.6 51.63111 8 59 56 57.71 54.47595 9 72 58.2 55.58 55.51648 10 66 60.8 57.54 59.30769 11 64 63 63.4 60.84692 12 78 65 63.09 61.57213 13 67.8 69.98 65.35054 75.19 76.09091

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