Question

Forecasts and actual sales of MP3 players at Just Say Musicare as follows:

Month                   Forecast    Actual Sales

March                    150            170

April                      220            229

May                       205            192

June                       256            241

July                       250            238

August                  260            210

September             270            225

October                 280            179

a. Plot the data and show the plot using Excel, Word or PowerPoint.  

b. Provide insights about the time series

c. What is the forecast for November, using a two-period moving average?

Note also that the forecast values provided are irrelevant to computing these moving average forecasts.

d. What is the forecast for November, using a three-period moving average?

e. Compute MSE for the two- and three-period moving average models and compare your results.

Note that we can only compute these measures through October because we need to know the actual sales.

PLEASE BE VERY DETAILED WHEN EXPLAINING AND SHOW ALL STEPS!! THANK YOU SO MUCH!!

Answer 1

a)

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b) Looking at the time series, we obseve that the actual sales is less than the forecasted sales a majority of the times.

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c) Forecast for november using a two-period moving average = ( 225 + 179) $\div$ 2

Forecast for november using a two-period moving average = 202

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d) Forecast for November, using a three-period moving average = ( 210 + 225 + 179) $\div$ 3

Forecast for November, using a three-period moving average = 204.67