. The number of pizzas ordered on Friday evenings between 5:30 and 6:30 at a piz
ID: 2381812 • Letter: #
Question
. The number of pizzas ordered on Friday evenings between 5:30 and 6:30 at a pizza delivery location for the last 10 weeks is shown below. Use exponential smoothing with smoothing constants of .3 and .6 to forecast a value for week 11. Compare your forecasts using MSE. Which smoothing constant would you prefer?
58, 46, 55, 39, 42, 63, 54, 55, 61, 52
The number of pizzas ordered on Friday evenings between 5:30 and 6:30 at a pizza delivery location for the last 10 weeks is shown below. Use exponential smoothing with smoothing constants of .3 and .6 to forecast a value for week 11. Compare your forecasts using MSE. Which smoothing constant would you prefer?Explanation / Answer
ANS:
FORECASTING WITH EXPONENTIAL SMOOTHING
************************************************
THE SMOOTHING CONSTANT IS 0.2
Time Period
Actual Value
Forecast
Forecast Error
1
2
46
58.00
-12.00
3
55
55.60
-0.60
4
39
55.48
-16.48
5
42
52.18
-10.18
6
63
50.15
12.85
7
54
52.72
1.28
8
55
52.97
2.03
9
61
53.38
7.62
10
52
54.90
-2.90
THE MEAN SQUARE ERROR 84.12
THE FORECAST FOR PERIOD 11 54.32
FORECASTING WITH EXPONENTIAL SMOOTHING
************************************************
THE SMOOTHING CONSTANT IS 0.8
Time Period
Actual Value
Forecast
Forecast Error
1
2
46
58.00
-12.00
3
55
48.40
6.60
4
39
53.68
-14.68
5
42
41.94
0.06
6
63
41.99
21.01
7
54
58.80
-4.80
8
55
54.96
0.04
9
61
54.99
6.01
10
52
59.80
-7.80
THE MEAN SQUARE ERROR 107.17
THE FORECAST FOR PERIOD 11 53.56
Based on MSE, smoothing with a = .2 provides a better model
Time Period
Actual Value
Forecast
Forecast Error
1
2
46
58.00
-12.00
3
55
55.60
-0.60
4
39
55.48
-16.48
5
42
52.18
-10.18
6
63
50.15
12.85
7
54
52.72
1.28
8
55
52.97
2.03
9
61
53.38
7.62
10
52
54.90
-2.90
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