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.

Q.1

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) 58  (9) 67  (10) 66  (11) 67  (12) 76

I.) With linear regression, the forecast for period 13 will be:

II.) With quadratic regression, the forecast for period 13 will be:

III.) Considering only the forecasts for period 6-12, what is the lowest MAD value for any of the methods?

Explanation / Answer

THe Table for all the values 5MA, 4 period weighted average, exponentia smoothing and LInear trend.

WIth linear regression Forecast for period 13 = 74.2727

Quadratic Regression Forecast for period 13 = 75.626

MAD Table for each type of forecasts

SO minimum MAD value is for quadratic regression.  

Period Forecast 5MA 4PWMA Exp0 smoothing Linear Trend Quadratic 1 45 2 52 3 48 4 59 5 55 53 6 54 51.8 55.39 53.4600 58.0944 57.496 7 64 53.6 54.48 53.5842 60.4056 59.798 8 58 56 60.53 55.9798 62.7168 62.196 9 67 58 59.15 56.4445 65.0280 64.690 10 66 59.6 64.03 58.8722 67.3392 67.280 11 67 61.8 65.56 60.5116 69.6503 69.966 12 76 64.4 66.47 62.0040 71.9615 72.748 13 66.8 72.59 65.2230 74.2727 75.626

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