1.Passenger miles flown on Northeast Airlines, a commuter firm serving the Bosto

Question

1.Passenger miles flown on Northeast Airlines, a commuter firm serving the Boston hub, are recorded and illustrated in the dataset in the Excel spreadsheet. Assuming an initial forecast for week 1 of 17,000 miles, use exponential smoothing to forecast the miles for week 13. Use = 0.2.

Use the dataset from question 1 to forecast the miles for week 13 using a 3-week moving average. Compare the results with the results from question 1.  

Exponential Smoothing Week Passenger Miles (in thousands) 1 17 2 21 3 19 4 23 5 18 6 16 7 20 8 18 9 22 10 20 11 15 12 22 13 = 0.2

Explanation / Answer

1) exponential smoothing:

as we know that forecast for next period=alpha*actual for last period+(1-alpha)*forecast for last priod

threfore:

forecast for week 13 is 19.18.

2)

for 3 month moving average:

forecast =(total of last 3 month actual values)/3

therefore

3 month moving average forecast for week 13 =19

exponential smoothing forecast for week 13 =19.18

Week Actual Forecast 1 17 17.00 2 21 17.00 3 19 17.80 4 23 18.04 5 18 19.03 6 16 18.83 7 20 18.26 8 18 18.61 9 22 18.49 10 20 19.19 11 15 19.35 12 22 18.48 13 19.18

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