# Forecasting

Satisfactory Essays
623 Words
Grammar
Plagiarism
Writing
Score
Forecasting
FORECASTING
Q1:
Moving averages are often used to identify movements of stock prices. Weekly closing prices (in \$ per share) for Toys Я Us for 22 September, 1997, through December 8, 1997, are as follows (Prudential Securities Inc);
Month
Sept 22
Sept 29
Oct 6
Oct 13
Oct 20
Oct 27
Nov 3
Nov 10
Nov 17
Nov 24
Dec 1
Dec 8

Fund Price
37.8750
35.6250
34.6875
33.5625
32.6250
34.0000
33.6250
35.0625
34.0625
34.1250
33.2500
32.0625

a. Use a 3-month simple moving average to smooth the time series. Forecast the closing price for December 15, 1997.
b. Use a 3-month weighted moving average to smooth the time series. Use a weight of 0.4 for the most recent period, 0.4 for the next period back, and 0.2 for the third period back. Forecast the closing price for December 15, 1997.
c. Use exponential smoothing with a smoothing constant of α = 0.35 to smooth the time series. Forecast the closing price for December 15, 1997.
d. Which of the three methods do you prefer? Why?
Q2:
Hudson Marine has been an authorized dealer for C&D marine radios for the past 7 years.
The number of radios sold each year is shown below:
Year
1
2
3
4
5
6
7

35
50
75
90
105
110
130

a. Graph this time series. Does a linear trend appear?
b. Develop the equation for the linear trend component for the time series.
c. Use the linear trend developed in part (b) to prepare a forecast sale in year 8.

d. Use the linear trend developed in part (b), make a forecast for year 10.
Suppose that the following are the quarterly sales data for the past 7 years.
Year
1
2
3
4
5
6
7

Quarter
1
6
10
14
19
22
24
28

Quarter
2
15
18
26
28
34
36
40

Quarter
3
10
15
23
25
28
30
35

Quarter
4
4
7
12
18
21
20
27

50
75
90
105
110
130

a. Show the 4-quarter moving average values for this time series. Plot both the original time series and the moving averages

## You May Also Find These Documents Helpful

• Satisfactory Essays

2. The use of quarterly data to develop the forecasting model Yt = a +bYt−1 is an example of which forecasting technique?…

• 454 Words
• 3 Pages
Satisfactory Essays
• Satisfactory Essays

What is the forecasted revenue for JCrew in Quarter I of 2010 using Exponential Smoothing?…

• 395 Words
• 2 Pages
Satisfactory Essays
• Satisfactory Essays

C) We can find K by using the regression line method and time series data or cross sectional data.…

• 381 Words
• 2 Pages
Satisfactory Essays
• Satisfactory Essays

c. Based on your findings in parts (a) and (b), discuss the effect of both the size of the rate of return and the time until receipt of payment on the present value of future sum.…

• 418 Words
• 2 Pages
Satisfactory Essays
• Satisfactory Essays

Forecast personnel expenses for fiscal year 20X5 using moving averages weighted moving averages, exponential smoothing, and time series regression. For moving averages and weighted moving averages, use only the data for the past three fiscal years. For weighted moving averages, assign a value of 1 to the data for 20 X 2, a value of 2 to the data for 20 X 3, and a value of 3 to the data for 20 X 4. For exponential smoothing, assume that the last forecast for fiscal year 20 X 4 was \$6,300,000. You decide on the alpha to be used for exponential smoothing. For time series regression, use the data for all four fiscal years. Which forecast will you use? Why?…

• 492 Words
• 2 Pages
Satisfactory Essays
• Good Essays

(b) Find the average rate of change in the interval 0 ≤ t ≤ 1…

• 2200 Words
• 7 Pages
Good Essays
• Satisfactory Essays

The following is the list of MAD statistics for each of the models you have estimated from time-series data:…

• 1811 Words
• 17 Pages
Satisfactory Essays
• Satisfactory Essays

a. Make a scatter plot of the data, draw a line of best fit, and then find the equation of the line of best fit. Show and explain your work.…

• 196 Words
• 1 Page
Satisfactory Essays
• Satisfactory Essays

## Chap015

• 14733 Words
• 77 Pages

7. Which of the following is used to remove the effects of seasonality from historic data?…

• 14733 Words
• 77 Pages
Satisfactory Essays
• Satisfactory Essays

1. Read Problem 6 in Chapter 6 of your textbook. Calculate and answer parts a through d. Include all calculations and spreadsheets in your post. Explain why the moving average method was used instead of another forecasting method. What might be another forecasting method that could prove to be just as useful?…

• 215 Words
• 4 Pages
Satisfactory Essays
• Satisfactory Essays

1) Which type of function (linear, exponential, or cubic) do you believe will best fit the data? Support your choice.…

• 657 Words
• 7 Pages
Satisfactory Essays
• Satisfactory Essays

D. Can change from one year to the next even if there is no change in output.…

• 502 Words
• 3 Pages
Satisfactory Essays
• Powerful Essays

series, of the predicting ability of a popular technical exchange tool, the Moving Average Rule. A short-term and a…

• 3465 Words
• 14 Pages
Powerful Essays
• Powerful Essays

From both Chart 1 and Chart 2, the drawing conclusion is that the data has trend-cycle and seasonal components. Firstly, although there is no general upward trend and downward trend, clearly there is a cycle component: the data value climbs up in the first 20 data and then displays a down trend following behind. As to seasonal component, it is clearly from the time series plot that in each year the highest investment happened in the fourth quarter, while the lowest one occurred around the first quarter. From the ACF plot, the most significant autocorrelation is in lag 4, and there is also a spike in lag 8, indicating that there is a quarterly seasonal component. By carrying out a first difference, the ACF series plot display obvious quarterly seasonal component. Therefore the data value…

• 3588 Words
• 15 Pages
Powerful Essays
• Satisfactory Essays

7 14 21 28 4 11 18 25 4 11 18 25 1 8 15 22 29 6 13 20 27 3 10 17 24…

• 386 Words
• 2 Pages
Satisfactory Essays