Exam 11: Forecasting Models

Use this information to answer the following questions. Joe Smith operates an ice cream shop and works only three days a week.The number of ice cream cones that he sells is shown as follows. Friday 100 114 110 115 112 Saturday 130 135 140 145 142 Suraday 60 65 55 50 63 -Refer to the table above. a.Use a 3-period moving average to forecast next day's sales. b.Use a 3-period weighted moving average to forecast next day's sales.Use Solver to determine the optimal weights. c.Which one of the above forecasting techniques provides a lower MSE?

Two different forecasting techniques (F1 and F2)were used to forecast sales.Actual sales and the two sets of forecasts are as follows: Perind 1 2 3 4 5 6 Actual Sales 12 14 13 11 17 18 10 13 15 10 18 18 11 15 12 13 15 17 a.Compute MAD for each forecasting technique.Which forecasting technique is more accurate based on the MAD criterion? b.Compute the MSE for each set of forecasts.Which forecasting technique is more accurate based on the MSE criterion?

Use this information to answer the following questions. The following time series represent the total population of the United States,in thousands,over the last 12 years. Year Population (in 000s) 1991 253,493 1992 256,894 1993 260,255 1994 263,436 1995 266,557 1996 269,667 1997 272,912 1998 276,115 1999 279,295 2000 282,434 2001 285,545 2002 288,600 -Refer to the table above.Using Solver to find the optimal alpha that minimizes MAD,use exponential smoothing to forecast the population of the United States in 2003.

Consider the following time series data.Suppose that you use exponential smoothing with an alpha of 0.7 to fit a forecasting model.The forecast for period 7 is Period Forecast Actual value Period 1 10 10 Period 2 10 11 Period 3 10.7 9 Period 4 9.51 12 Period 5 11.253 13 Period 6 12.476 11

Use this information to answer the following questions. The following data,provided by the U.S.Bureau of Citizenship and Immigration Services,represent the number of immigrants admitted to the United States,in thousands,from 1990-2001. Year No. of Immigrants (in 000s) 1990 1536 1991 1827 1992 974 1993 904 1994 804 1995 720 1996 916 1997 798 1998 654 1999 647 2000 850 2001 1064 -Refer to the table above. a.Use exponential smoothing with a smoothing constant of 0.3 to forecast the number of immigrants in 2002. b.Use exponential smoothing with a smoothing constant of 0.6 to forecast number of immigrants in 2002. c.Which of the two methods provides a more accurate forecast based on the MAD criterion?

Use this information to answer the following questions. A hot dog stand owner has collected the following time series data on the number of hot dogs sold over the last 12 quarters. Year Quarter Demand 1 Winter 29 1 Spring 65 1 Summer 56 1 Fall 45 2 Winter 23 2 Spring 57 2 Summer 48 2 Fall 32 3 Winter 14 3 Spring 55 3 Summer 52 3 Fall 25 -Refer to the table above. a.Prepare a line graph of the time series data. b.Do the data appear to be stationary or non-stationary?

Consider the following data and Excel output for a simple linear regression model.How much of the total variation in the dependent variable (Y)is explained by the independent variable (X)? Period Y X Period 1 10 1 Period 2 11 2 Period 3 9 3 Period 4 12 4 Period 5 13 5 Period 6 12 6 Period 7 15 7 Intercept 2.267 Slope 0.843 SE 1.810 Correlation 0.890 r-squared 0.791

Use this information to answer the following questions. Joe Smith operates an ice cream shop and works only three days a week.The number of ice cream cones that he sells is shown as follows. Friday 100 114 110 115 112 Saturday 130 135 140 145 142 Suraday 60 65 55 50 63 -Refer to the table above. a.Use exponential smoothing with an alpha value of 0.5 to forecast next day's sales. b.Use Solver to determine the optimal alpha value that minimizes MSE.Forecast next day's sales using this optimal alpha value.

Use this information to answer the following questions. The following time series,provided by the Federal Loan Home Mortgage Corporation,represents weekly 30-year fixed mortgage rates. Date Mortgage Rate (\%) October 14, 2005 6.03 October 21, 2005 6.10 October 28, 2005 6.15 November 4, 2005 6.31 November 11, 2005 6.36 November 18, 2005 6.37 November 25, 2005 6.28 December 2, 2005 6.26 December 9, 2005 6.32 December 16,2005 6.30 December 23, 2005 6.26 December 30,2005 6.22 January 6, 2006 6.21 January 13, 2005 6.15 -Refer to the table above.Use a 4-period weighted moving average to forecast the next weekly mortgage rate.Use Solver to determine the optimal weights based on minimizing the MAD criterion.

The value of the coefficient of determination R² ranges between

Suppose that you intend to use Solver to compute the optimal weights for a weighted moving average.Changing variable cells would refer to:

Use this information to answer the following questions. A hot dog stand owner has collected the following time series data on the number of hot dogs sold over the last 12 quarters. Year Quarter Demand 1 Winter 29 1 Spring 65 1 Summer 56 1 Fall 45 2 Winter 23 2 Spring 57 2 Summer 48 2 Fall 32 3 Winter 14 3 Spring 55 3 Summer 52 3 Fall 25 -Refer to the table above.Forecast next quarterly sales using a 3-period weighted moving average.Use Solver to determine the optimal weights that minimize MSE.

Use this information to answer the following questions. Joe Smith operates an ice cream shop and works only three days a week.The number of ice cream cones that he sells is shown as follows. Friday 100 114 110 115 112 Saturday 130 135 140 145 142 Suraday 60 65 55 50 63 -Refer to the table above.Using a multiplicative decomposition model,forecast ice cream sales for the next three days.

Consider the following data that was fitted using a linear trend. Period Actual value (or) Y Period number (or) X Period 1 10 1 Period 2 11 2 Period 3 9 3 Period 4 12 4 Period 5 13 5 Period 6 12 6 Period 7 15 7 The intercept of the trend line is 8.714,and the slope is 0.75.What is the forecast error for period 7?

Which of the following is NOT considered to be a Time-Series method of forecasting?

An iterative group process that allows experts,who may be located in different places,to make forecasts is referred to as ________.

Use this information to answer the following questions. A hot dog stand owner has collected the following time series data on the number of hot dogs sold over the last 12 quarters. Year Quarter Demand 1 Winter 29 1 Spring 65 1 Summer 56 1 Fall 45 2 Winter 23 2 Spring 57 2 Summer 48 2 Fall 32 3 Winter 14 3 Spring 55 3 Summer 52 3 Fall 25 -Refer to the table above.Forecast next quarterly sales using exponential smoothing.Use Solver to find the optimal smoothing constant value that minimizes MSE.

The value of the correlation coefficient "r" ranges between

The least squares method for linear regression:

The following data were collected on the height (inches)and weight (pounds)of 5 students. Height 72 70 62 65 67 Weight 180 172 125 132 145 a.Develop a regression model to predict weight based on height. b.What percent of the total variation in weight has been explained by height? c.If a student is 69 inches tall,what would you estimate the weight to be?