Assignment
This Assignment requires you to use Excel.
Question 1
Determine the error for each of the following forecasts. Then, calculate MAD and MSE.
|
Period
|
Value
|
Forecast
|
Error
|
|
1
|
202
|
-
|
-
|
|
2
|
191
|
202
|
|
|
3
|
173
|
192
|
|
|
4
|
169
|
181
|
|
|
5
|
171
|
174
|
|
|
6
|
175
|
172
|
|
|
7
|
182
|
174
|
|
|
8
|
196
|
179
|
|
|
9
|
204
|
189
|
|
|
10
|
219
|
198
|
|
|
11
|
227
|
211
|
|
Question 2
The U.S. Census Bureau publishes data on factory orders for all manufacturing, durable goods, and nondurable goods industries. Shown here are factory orders in the United States over a 13-year period ($ billion).
First, use the data to develop forecasts for years 6 through 13 using a 5-year moving average.
Then, use the data to develop forecasts for years 6 through 13 using a 5-year weighted moving average. Weight the most recent year by 6, the previous year by 4, the year before that by 2, and the other years by 1.
Answer the following questions:
a) What is the forecast for year 13 based on the 5-year moving average?
b) What is the forecast for year 13 based on the 5-year weighted moving average?
c) What is the MAD for the moving average forecast?
d) What is the MAD for the weighted moving average forecast?
e) Which forecasting model is better?
|
Year
|
Factory orders
|
|
1
|
2,512.70
|
|
2
|
2,739.20
|
|
3
|
2,874.90
|
|
4
|
2,934.10
|
|
5
|
2,865.70
|
|
6
|
2,978.50
|
|
7
|
3,092.40
|
|
8
|
3,052.60
|
|
9
|
3,145.20
|
|
10
|
3,114.10
|
|
11
|
3,257.40
|
|
12
|
3,654.00
|
|
13
|
|
Question 3
The "Economic Report to the President of the United States" included data on the amounts of manufacturers' new and un?lled orders in millions of dollars. Shown here are the ?gures for new orders over a 21-year period.
Use the charting tool in Excel to develop a regression model to ?t the trend effects for the data. Use a linear model and then try a polynomial (order 2) model. Make sure the charts show the line formula and the r-squared value. Include both charts in your report. Then, answer the following question:
How well does either model ?t the data? Which model should be used for forecasting? Explain using the relevant metrics.
|
Year
|
Total Number of New Orders
|
|
1
|
55,022
|
|
2
|
55,921
|
|
3
|
64,182
|
|
4
|
76,003
|
|
5
|
87,327
|
|
6
|
85,139
|
|
7
|
99,513
|
|
8
|
115,109
|
|
9
|
116,251
|
|
10
|
121,547
|
|
11
|
123,321
|
|
12
|
141,200
|
|
13
|
162,140
|
|
14
|
168,420
|
|
15
|
171,250
|
|
16
|
176,355
|
|
17
|
195,204
|
|
18
|
209,389
|
|
19
|
237,025
|
|
20
|
272,544
|
|
21
|
293,475
|
Attachment:- unit template.rar