Question 1 The following table shows the weekly revenue (in $millions) of a department store for 9 consecutive weeks. We

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Question 1 The Following Table Shows The Weekly Revenue In Millions Of A Department Store For 9 Consecutive Weeks We 1 (168.44 KiB) Viewed 46 times

Question 1 The following table shows the weekly revenue (in $millions) of a department store for 9 consecutive weeks. Week (t) 1 2 3 4 5 6 7 8 9 Revenue (Y) 11.3 12.1 14.9 15.5 10.4 9.8 16.8 15.1 13.7 (a) (b) (c) (d) Use the 4-period moving average to forecast the revenue in week 10. (1 mark) Use simple exponentially smoothing with a = 0.44 to forecast the revenue in week 10. (3 marks) Explain the difference between choosing a large a and a small a in simple exponential smoothing (1 mark) Use the Holt's double exponential smoothing with a = 0.25, B = 0.35 to forecast the revenue in week 10. (8 marks) At what circumstances should we adopt the double exponential smoothing method rather than the simple exponential smoothing method? (1 mark) Use the root mean squared error (RMSE) to evaluate the 3 forecasting approaches above. Which forecasting approach do you recommend for the given data? Explain. (7 marks) Explain why it is a good practice to try more than one forecasting method for a particular problem, holding out some recent data, and then to compute forecasts of these holdout observations using the different methods. (1 mark) (e) (f) (g)