Week 3 Check Y Understanding, Eco 550

Topics: Exponential smoothing, Moving average, Time series analysis Pages: 2 (381 words) Published: May 19, 2013
Chapter 5: Problems 1, 5, 6, and 9
1) A)$66,000
B) S will then become $754.29
C) We can find K by using the regression line method and time series data or cross sectional data. D) The potential weakness for this model is variable t because it is unknown. 5)2000 |800 | xxxx

2001925xx800800
2002900xx913838
20031025x875901857
20041150x9501013907
2005116096010251136980
200612001032111211581034
200711501087117011961084
200812701137117011551104
200912901186120712591154
2010x1214123612871195
B)Five-year moving average = 141.9 
Three-year moving average = 78.6 
Exponential smoothing (w = .9) = 45.7 
Exponential smoothing (w = .3) = 110.9
C)I would use the exponential smoothing w=.9 because of the trending factor 6)A)In 2010 = 11450 units
B)Sales would go from 11450 to 1100, which is about 3.9% reduction/loss
C)Sales would decrease from 11450 to 9650 which is about a 30% reduction 9)Quarter 1 winter / 8.267 mill
Quarter 2 spring / 12.456 mill
Quarter 3 summer / 14.521 mill
Quarter 4 fall / 10.987 mill

Chapter 6: Problems 2, 7, 9, and 10
2.)One step that they could take is calculating how much the average dollar is worth compared to how much their product/services cost this will give them an estimate of how much they will profit or how much they loose. They could also make future investments in stocks, bonds, assets that could possibly help cover their losses, or they can even accept money from other countries as well. 7) In this case, the Japanese Yen decreases in value which will increase their cost significantly. Their cost could jump upwards to 30%. In return, Boeing profit will increase because the Yen is no longer worth as much, and is now cheaper to purchase with foreign currencies. 9) Some countries will enjoy an absolute trade advantage based on the real terms of trade. Spain and Portugal will become more competitive than Greece. 10) Three...
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