- 5 Exercise 5 5 A Firm Experienced The Demand Shown In The Following Table Fill In The Table By Preparing Forecasts Bas 1 (115.91 KiB) Viewed 12 times
5. Exercise 5.5 A firm experienced the demand shown in the following table. Fill in the table by preparing forecasts based on a five-year moving average, a three-year moving average, and exponential smoothing (W=0.9w=0.9 and w=0.3w=0.3). (Note: The exponential smoothing forecasts may be begun by assuming Yt+1=YtY't+1=Yt) Moving Average Year Actual Demand (5-year) (3-year) 2000 900 2001 885 2002 875 2003 870 2004 870 2005 875 2006 885 Year Actual Demand Moving Average Exponential Smoothing 2007 900 2008 920 2009 945 2010 * The following table shows the square errors, (Yt-Y't-1)2Yt-Y't-12, for forecasts from 2005 through 2009. Fill the table by calculating the root mean square error (RMSE) for each of the methods. Square Error Moving Average Exponential Smoothing Year (5-year) (3-year) (W=0.9) (W = 0.3) 2005 25 25 25 2006 100 100 36 2007 625 256 361 2008 1,600 1,089 484 1,089 2009 3,025 1,849 729 2,304 RMSE Based on the RMSE criterion, which of the forecasting methods i the most accurate? Three-year moving average 9 169 529 Five-year moving average Exponential Smoothing (W=0.9) (W = 0.3) Exponential smoothing (w = 0.9) Exponential smoothing (w = 0.3) |||