For this example, apply an exponental smoothing model with α = 0.25 to forecast the monthly sales for months 2 through 20
![5. [20 pts] Historicall data is often used in marketing to drive estimates of future demand. A common estimate (or forecast) used to predict future demand is the exponential smoothing. This forecasting method considers a weighted average where the most recent observations are weighted more strongly The smoothing constant α is a weighting factor and parameter of the method, and it is up to the user to fine tune it for the application of their choice. To compute an exponentially smoothed forecast in the period t 1, we use the following equation: In other words, the forecast for each period depends on the demand and forecast values of the previous period. Also, we assume the forecast value for period 1 is equal to the demand in period 1 The mean absolute deviation is a common criterion used to compare forecasting models. The absolute deviation for any given peniod is the absolute difference between the forecast and the observed demand for the period (ie, eFt-Del). Once an absolute deviation is calculated for every single forecasting period, they are averaged to produce the estimate of the mean absolute deviation (MAD) of the model. Period Demand Error (et) Error Error 0.50 | (et) α-0.25 | | α-0.30 15 23 10 32 20 a. For this example, apply an exponental smoothing model with a0.25 to forecast the monthly sales for months 2 through 20 b. Use a0.30. How do these results compare to the ones in (a)? c. Use a0.50. How do these results compare to the ones in (a) and (b)? d. Calculate the mean absolute deviation (MAD) of each model. Which value of a would you prefer for this situation? Why?](http://img.homeworklib.com/questions/24e61a10-a7ff-11ec-84cd-3f3881fd538d.png?x-oss-process=image/resize,w_560)
a. For this example, apply an exponental smoothing model with α = 0.25 to forecast the monthly sales for months 2 through 20.
b. Use α = 0.30. How do these results compare to the ones in (a)?
c. Use α = 0.50. How do these resuts compare to the ones in (a) and (b)?
d. Calculate the mean absolute deviation (MAD) of each model. Which value of a would you prefer for this situation? Why?
Homework Answers
a) The table is attached with the forecast value for 0.25
b) The table is attached with the forecast value for 0.3
c)The table is attached with the forecast value for 0.5
d) MAD (0.25) = 7.3955 ; MAD(0.3) = 6.6545; MAD(0.5) = 5.1582 MAD is small for Alpha value of 0.5 and which is more reliable over other two models
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For this example, apply an exponental smoothing model with α = 0.25 to forecast the monthly sales for months 2 through 20
Predict Inc., is using a simple exponential smoothing model to forecast their monthly sales but they...
Predict Inc., is using a simple exponential smoothing model to forecast their monthly sales but they are not sure of the best alpha value to use. They ran some computerized forecasts with different alpha values and reported the following. What alpha value should they use? alpha 0.15 0.20 0.25 0.30 0.35 0.40 0.45 0.50 MAD 18.4 14.7 13.2 16.2 15.3 11.7 10.2 12.5 Group of answer choices 0.45 0.15 0.2 0.35 0.5
The following table contains the demand from the last 10 months: answer to all the boxes...
The following table contains the demand from the last 10 months: answer to all the boxes plz MONTH ACTUAL DEMAND 1 31 2 34 3 35 4 39 5 40 6 45 7 45 8 47 9 43 10 44 a. Calculate the single exponential smoothing forecast for these data using an α of 0.30 and an initial forecast (F1) of 31. (Round your intermediate calculations and answers to 2 decimal places.) Month Exponential Smoothing 1 2 3 4 5...
The following table contains the demand from the last 10 months: MONTH ACTUAL DEMAND 1 36...
The following table contains the demand from the last 10 months: MONTH ACTUAL DEMAND 1 36 2 38 3 40 4 41 5 43 6 42 7 43 8 45 9 46 10 48 a. Calculate the single exponential smoothing forecast for these data using an α of 0.30 and an initial forecast (F1) of 36. (Round your intermediate calculations and answers to 2 decimal places.) b. Calculate the exponential smoothing with trend forecast for these data using an α...
The following table contains the demand from the last 10 months: MONTH ACTUAL DEMAND 1 27...
The following table contains the demand from the last 10 months: MONTH ACTUAL DEMAND 1 27 2 29 3 33 4 41 5 44 6 43 7 44 8 46 9 47 10 41 a. Calculate the single exponential smoothing forecast for these data using an α of 0.30 and an initial forecast (F1) of 27. (Round your intermediate calculations and answers to 2 decimal places.) Month Exponential Smoothing 1 27 2 27 3 27.6 4 29.22 5 32.75 6...
2. (20 points) The following table shows the monthly sales in a local grocery store Month and 120 115 125 119 127 114 114 120 124 116 137 10 a. Suppose that Three-weeks moving average are used to...
2. (20 points) The following table shows the monthly sales in a local grocery store Month and 120 115 125 119 127 114 114 120 124 116 137 10 a. Suppose that Three-weeks moving average are used to forecast sales. Determine the one-step-ahead forecasts for weeks 4 through 10. b. Suppose that exponential smoothing is used with a smoothing constant α-02. Find the exponential smoothing forecasts weeks 4 through 10. (To get the method started, use 120.00 as the forecast...
You want to compare how two forecasting methods would perform on some historical sales data. You...
You want to compare how two forecasting methods would perform on
some historical sales data. You will forecast the sales for months
4 through 19, calculate the mean absolute deviation (MAD) for both
methods, and you can claim that the one that has lower MAD
performed better, at least for the historical data.
a) The first method is known as the moving average method. The
forecast for a month will be the average sales of three previous
months. So, forecast...
2. Consider the following time series data: 2Month Value 20 15 23 6 4 13 6 18 25 10 8 10 9 24 12 10 21 13 19 14 15...
2. Consider the following time series data: 2Month Value 20 15 23 6 4 13 6 18 25 10 8 10 9 24 12 10 21 13 19 14 15 la. Use a α # 0.25 to compute the exponential smoothing values for the time series. Compute MSE and a forecast for Month 12. b. Compare the two-month moving average forecast with the exponential smoothing forecast using a 0.25. Which appears to 17 provide the better forecast based on MSE?...
excel spreadsheet information: Month Sales (in millions of boxes) 1 1306 2 1305 3 1311 4...
excel spreadsheet information:
Month
Sales (in millions of boxes)
1
1306
2
1305
3
1311
4
1313
5
1324
6
1329
7
1346
8
1347
9
1378
10
1394
11
1441
12
1469
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Forecasts and actual sales of MP3 players at Just Say Music are as follows: Month Forecast...
Forecasts and actual sales of MP3 players at Just Say Music are 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 Answer the following questions. a. Plot the data and provide through insights about the time series. (Use Microsoft Excel and attach the time series graph.) b. What is the forecast for November, using a two-period moving average? c....
Please help with questions 7 - 10. PART IV Planning and Controling Operations and Supply Chains...
Please help with questions 7 - 10.
PART IV Planning and Controling Operations and Supply Chains 290 period 1 was 250. Plot the results. Which model appears to work better? Why? 10. After graduating from college, you and your friends start selling birdhouses made from recycled plast has caught on, as shown by the following sales figures For problems 4 through 6, use the following time series data: The idea DEMAND MONTH January 2012 February March April May June 119...
2. (20 points) The following table shows the monthly sales in a local grocery store Month and 120 115 125 119 127 114 114 120 124 116 137 10 a. Suppose that Three-weeks moving average are used to forecast sales. Determine the one-step-ahead forecasts for weeks 4 through 10. b. Suppose that exponential smoothing is used with a smoothing constant α-02. Find the exponential smoothing forecasts weeks 4 through 10. (To get the method started, use 120.00 as the forecast...
You want to compare how two forecasting methods would perform on
some historical sales data. You will forecast the sales for months
4 through 19, calculate the mean absolute deviation (MAD) for both
methods, and you can claim that the one that has lower MAD
performed better, at least for the historical data.
a) The first method is known as the moving average method. The
forecast for a month will be the average sales of three previous
months. So, forecast...
2. Consider the following time series data: 2Month Value 20 15 23 6 4 13 6 18 25 10 8 10 9 24 12 10 21 13 19 14 15 la. Use a α # 0.25 to compute the exponential smoothing values for the time series. Compute MSE and a forecast for Month 12. b. Compare the two-month moving average forecast with the exponential smoothing forecast using a 0.25. Which appears to 17 provide the better forecast based on MSE?...
excel spreadsheet information:
Month
Sales (in millions of boxes)
1
1306
2
1305
3
1311
4
1313
5
1324
6
1329
7
1346
8
1347
9
1378
10
1394
11
1441
12
1469
Problem 3 You have realized that the sales for Select-A-Size Paper Towel packs have been increasing over the past year. You have learned that the double exponential smoothing method can account for such a trend in the data. Use double (trend-adjusted) exponential smoothing method to forecast sales...
Please help with questions 7 - 10.
PART IV Planning and Controling Operations and Supply Chains 290 period 1 was 250. Plot the results. Which model appears to work better? Why? 10. After graduating from college, you and your friends start selling birdhouses made from recycled plast has caught on, as shown by the following sales figures For problems 4 through 6, use the following time series data: The idea DEMAND MONTH January 2012 February March April May June 119...
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