2 of 3 (1 complete) roblem 4.9 Brief Lenovo uses the Zx-81 chip in some f ts lap

Question

2 of 3 (1 complete) roblem 4.9 Brief Lenovo uses the Zx-81 chip in some f ts laptop computers. The prices for the chip during the last 4 months were as follows: Month January February March April Price Per Chip $1.80 $1.61 $1.63 $1.91 This exercise contains only parts a, b, and c. a) Using a 2-month moving average, calculate the forecast for March and April (round your responses to two decimal places) Month Mar Apr Forecast.71$1.62 b) Using a 3-month moving average, calculate the forecast for April. The forecast for Apri is $ 1.68 (round your response to two decimal places) c) Calculate the mean absolute deviation based on a 2-month average. The mean absolute deviation based on 2-mionth moving average of March through April s s(round your response to three decimal places). Enter your answer in the answer box and then click Check Answer parts Clear Ali

Explanation / Answer

Solution:

(a) 2-month moving average (2-MA) for the month of March and April are calculated as below:

2-MA for March = (January price + February price) / 2

2-MA for March = ($1.80 + $1.61) / 2

2-MA for March = $1.71

2-MA for April = (February price + March price) / 2

2-MA for April = ($1.61 + $1.63) / 2

2-MA for April = $1.62

(b) 3-month moving average (3-MA) for the month of April is calculated as below:

3-MA for April = (January price + February price + March price) / 3

3-MA for April = ($1.80 + $1.61 + $1.63) / 3

3-MA for April = $1.68

(c) Mean Absolute Deviation (MAD) is calculated as,

MAD = Sum of absolute values of [(Actual - Forecast)] / Number of periods

MAD for a 2-month average of March through April is calculated below:

MAD = Sum of absolute values of [($1.63 - $1.71) + ($1.91 - $1.62)] / 2

MAD = ($0.08 + $0.29) / 2

MAD = 0.185

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