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...4.19 Income at the architectural firm Spraggins and Yunes for the period February to July was as follows: FEBRUARY MARCH APRIL MAY JUNE JULY MONTH Income (in $ thousand) 70.0 68.5 64.8 71.7 71.3 72.8 Use trend-adjusted exponential smoothing to forecast the firm's August income. Assume that the initial forecast average for February is $65,000 and the initial trend adjustment is 0. The smoothing constants selected are a = .1 and 3 = .2. Px ...4.20 Resolve Problem 4.19 with a = .1 and ß = .8. Using MSE, determine which smoothing constants provide a better forecast. PX

...4.19 Income at the architectural firm Spraggins and Yunes for the period February to July was as follows: FEBRUARY MARCH APRIL MAY JUNE JULY MONTH Income (in $ thousand) 70.0 68.5 64.8 71.7 71.3 72.8 Use trend-adjusted exponential smoothing to forecast the firm's August income. Assume that the initial forecast average for February is $65,000 and the initial trend adjustment is 0. The smoothing constants selected are a = .1 and 3 = .2. Px ...4.20 Resolve Problem 4.19 with a = .1 and ß = .8. Using MSE, determine which smoothing constants provide a better forecast. PX

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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**Problem 4.19** Income at the architectural firm Spraggins and Yunes for the period February to July was as follows: | Month | Income (in $ thousand) | |-------------|------------------------| | February | 70.0 | | March | 68.5 | | April | 64.8 | | May | 71.7 | | June | 71.3 | | July | 72.8 | Use trend-adjusted exponential smoothing to forecast the firm’s August income. Assume that the initial forecast average for February is $65,000 and the initial trend adjustment is 0. The smoothing constants selected are \( \alpha = 0.1 \) and \( \beta = 0.2 \). **Problem 4.20** Resolve Problem 4.19 with \( \alpha = 0.1 \) and \( \beta = 0.8 \). Using Mean Squared Error (MSE), determine which smoothing constants provide a better forecast.
Transcribed Image Text:**Problem 4.19** Income at the architectural firm Spraggins and Yunes for the period February to July was as follows: | Month | Income (in $ thousand) | |-------------|------------------------| | February | 70.0 | | March | 68.5 | | April | 64.8 | | May | 71.7 | | June | 71.3 | | July | 72.8 | Use trend-adjusted exponential smoothing to forecast the firm’s August income. Assume that the initial forecast average for February is $65,000 and the initial trend adjustment is 0. The smoothing constants selected are \( \alpha = 0.1 \) and \( \beta = 0.2 \). **Problem 4.20** Resolve Problem 4.19 with \( \alpha = 0.1 \) and \( \beta = 0.8 \). Using Mean Squared Error (MSE), determine which smoothing constants provide a better forecast.
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