Exam 16: Time-Series Forecasting

When using the exponentially weighted moving average for purposes of forecasting rather than smoothing,

TABLE 16-4 The number of cases of merlot wine sold by a Paso Robles winery in an 8-year period follows. -Referring to Table 16-4, exponential smoothing with a weight or smoothing constant of 0.4 will be used to smooth the wine sales. The value of E₂, the smoothed value for 2004 is ________.

TABLE 16-13 Given below is the monthly time-series data for U.S. retail sales of building materials over a specific year. The results of the linear trend, quadratic trend, exponential trend, first-order autoregressive, second-order autoregressive and third-order autoregressive model are presented below in which the coded month for the first month is 0: -Referring to Table 16-13, construct a scatter plot (i.e., a time-series plot) with month on the horizontal X-axis.

TABLE 16-3 The following table contains the number of complaints received in a department store for the first 6 months of last year. -Referring to Table 16-3, if a three-month moving average is used to smooth this series, how many values would it have?

TABLE 16-5 The number of passengers arriving at San Francisco on the Amtrak cross-country express on 6 successive Mondays were: 60, 72, 96, 84, 36, and 48. -Referring to Table 16-5, the number of arrivals will be exponentially smoothed with a smoothing constant of 0.1. The smoothed value for the second Monday will be ________.

TABLE 16-3 The following table contains the number of complaints received in a department store for the first 6 months of last year. -Referring to Table 16-3, suppose the last two smoothed values are 81 and 96 (Note: they are not). What would you forecast as the value of the time series for July?

TABLE 16-3 The following table contains the number of complaints received in a department store for the first 6 months of last year. -Referring to Table 16-3, if this series is smoothed using exponential smoothing with a smoothing constant of 1/3, how many values would it have?

Given a data set with 15 yearly observations, a 3-year moving average will have fewer observations than a 5-year moving average.

A second-order autoregressive model for average mortgage rate is: Rateᵢ = - 2.0 + 1.8(Rate)ᵢ₋₁ - 0.5 (Rate)ᵢ₋₂. If the average mortgage rate in 2010 was 7.0, and in 2009 was 6.4, the forecast for 2011 is ________.

TABLE 16-4 The number of cases of merlot wine sold by a Paso Robles winery in an 8-year period follows. -Referring to Table 16-4, a centered 5-year moving average is to be constructed for the wine sales. The number of moving averages that will be calculated is ________.

TABLE 16-7 The executive vice-president of a drug manufacturing firm believes that the demand for the firm's most popular drug has been evidencing an exponential trend since 1995. She uses Microsoft Excel to obtain the partial output below. The dependent variable is the log base 10 of the demand for the drug, while the independent variable is years, where 1995 is coded as 0, 1996 is coded as 1, etc. SUMMARY OUTPUT Regression Statistics Multiple R 0.996 R Square 0.992 Adjusted R Square 0.991 Standard Error 0.02831 Observations 12 Coefficients Intercept 1.44 Coded Year 0.068 -Referring to Table 16-7, the fitted trend value for 1995 is ________.

TABLE 16-12 A local store developed a multiplicative time-series model to forecast its revenues in future quarters, using quarterly data on its revenues during the 4-year period from 2005 to 2009. The following is the resulting regression equation: log₁₀ = 6.102 + 0.012 X - 0.129 Q₁ - 0.054 Q₂ + 0.098 Q₃ where is the estimated number of contracts in a quarter. X is the coded quarterly value with X = 0 in the first quarter of 2005. Q₁ is a dummy variable equal to 1 in the first quarter of a year and 0 otherwise. Q₂ is a dummy variable equal to 1 in the second quarter of a year and 0 otherwise. Q₃ is a dummy variable equal to 1 in the third quarter of a year and 0 otherwise. -Referring to Table 16-12, using the regression equation, what is the forecast for the revenues in the fourth quarter of 2011?

Which of the following is not an advantage of exponential smoothing?

TABLE 16-13 Given below is the monthly time-series data for U.S. retail sales of building materials over a specific year. The results of the linear trend, quadratic trend, exponential trend, first-order autoregressive, second-order autoregressive and third-order autoregressive model are presented below in which the coded month for the first month is 0: -Referring to Table 16-13, what is the exponentially smoothed forecast for the 13ᵗʰ month using a smoothing coefficient of W = 0.5 if the exponentially smooth value for the 10ᵗʰ and 11ᵗʰ month are 9,746.3672 and 9,480.1836, respectively?

TABLE 16-12 A local store developed a multiplicative time-series model to forecast its revenues in future quarters, using quarterly data on its revenues during the 4-year period from 2005 to 2009. The following is the resulting regression equation: log₁₀ = 6.102 + 0.012 X - 0.129 Q₁ - 0.054 Q₂ + 0.098 Q₃ where is the estimated number of contracts in a quarter. X is the coded quarterly value with X = 0 in the first quarter of 2005. Q₁ is a dummy variable equal to 1 in the first quarter of a year and 0 otherwise. Q₂ is a dummy variable equal to 1 in the second quarter of a year and 0 otherwise. Q₃ is a dummy variable equal to 1 in the third quarter of a year and 0 otherwise. -Referring to Table 16-12, to obtain a forecast for the third quarter of 2010 using the model, which of the following sets of values should be used in the regression equation?

TABLE 16-5 The number of passengers arriving at San Francisco on the Amtrak cross-country express on 6 successive Mondays were: 60, 72, 96, 84, 36, and 48. -Referring to Table 16-5, exponentially smooth the number of arrivals using a smoothing constant of 0.1.

The effect of an unpredictable, rare event will be contained in the ________ component.

TABLE 16-13 Given below is the monthly time-series data for U.S. retail sales of building materials over a specific year. The results of the linear trend, quadratic trend, exponential trend, first-order autoregressive, second-order autoregressive and third-order autoregressive model are presented below in which the coded month for the first month is 0: -Referring to Table 16-13, what is the value of the t test statistic for testing the significance of the quadratic term in the quadratic-trend model?

In selecting a forecasting model, you should perform a residual analysis.

TABLE 16-13 Given below is the monthly time-series data for U.S. retail sales of building materials over a specific year. The results of the linear trend, quadratic trend, exponential trend, first-order autoregressive, second-order autoregressive and third-order autoregressive model are presented below in which the coded month for the first month is 0: -Referring to Table 16-13, what is the p-value of the t test statistic for testing the appropriateness of the second-order autoregressive model?