Project #10232 - Forcasting

Word-process formulas using Equation Editor and diagrams using Drawing Tool.

Problem 1

The U.S. Census Bureau publishes data on factory orders for all manufacturing, durable goods, and nondurable goods industries. Shown here are factory orders in the United States from 1987 through 1999 ($ billion).

(a)   Use these data to develop forecasts for the years 1992 through 1999 using a 5-year moving average.

(b)  Use these data to develop forecasts for the years 1992 through 1999 using a 5-year weighted moving average. Weight the most recent year by 6, the previous year by 4, the year before that by 2, and the other years by 1.

(c)   Which method is more suitable for forecasting factory orders? Hint: Compare the two methods based on Mean Absolute Deviation (MAD)?http://edugen.wiley.com/edugen/courses/crs1396/art/common/pixel.gif

 

Year

Factory Orders ($ billion)

1987

2,512.7

1988

2,739.2

1989

2,874.9

1990

2,934.1

1991

2,865.7

1992

2,978.5

1993

3,092.4

1994

3,356.8

1995

3,607.6

1996

3,749.3

1997

3,952.0

1998

3,949.0

1999

4,137.0

(Black, Ken (2006). Business Statistics (4th ed. update). John Wiley & Sons, New York, NY. Page 615)

 

 

 


 

Problem 2

The following data list worldwide shipments of personal computers (in thousands) according to Dataquest.

 

Year

Shipments (in thousands)

1990

23,738

1991

26,966

1992

32,411

1993

38,851

1994

47,894

1995

60,171

1996

71,065

1997

82,400

1998

97,321

(a)   Use exponential smoothing to determine the forecast of shipments for the year 1999. Use the actual shipments for 1990 as the starting forecast for 1991. Use a smoothing constant of a = 0.4.

(b)  Plot the data, fit a trend line, and discuss the strength of prediction of the regression model.

(c)   Use the regression model to predict the shipments for the year 1999.

(d)  Compare the two forecasts. Which forecast would you prefer to use and why?

 (Adapted from: Black, Ken (2006). Business Statistics (4th ed. update). John Wiley & Sons, New York, NY. Page 622)

 

 

 

 

Subject Mathematics
Due By (Pacific Time) 08/05/2013 07:00 pm
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