A firm experienced the demand shown in the following table. Fill in the table by preparing forecasts based on a five-year moving average, a three-year moving average, and exponential smoothing (w = 0.9 and w=0.3). (Note: The exponential smoothing forecasts may be begun by assuming Ŷ+1=Y₁-) Moving Average Exponential Smoothing Year Actual Demand (5-year) (3-year) (W = 0.9) (W = 0.3) 2000 900 2001 885 2002 875 2003 870 2004 870 2005 875 2006 885 2007 900 2008 920 2009 945 44.4444 2010 The following table shows the square errors, (Y-1), for forecasts from 2005 through 2009. Fill the table by calculating the root mean square error (RMSE) for each of the methods. Square Error Moving Average Exponential Smoothing Year (5-year) (3-year) (W = 0.9) (W = 0.3) 2005 25 9 25 25 2006 100 169 100 36 2007 625 529 256 361 2008 1,600 1,089 484 1,089 2009 3,025 1,849 729 2,304 RMSE Based on the RMSE criterion, which of the forecasting methods is the most accurate? Exponential smoothing (w = 0.9) ○ Exponential smoothing (w = 0.3) ○ Three-year moving average O Five-year moving average

A firm experienced the demand shown in the following table. Fill in the table by preparing forecasts based on a five-year moving average, a three-year moving average, and exponential smoothing (w = 0.9 and w=0.3). (Note: The exponential smoothing forecasts may be begun by assuming Ŷ+1=Y₁-) Moving Average Exponential Smoothing Year Actual Demand (5-year) (3-year) (W = 0.9) (W = 0.3) 2000 900 2001 885 2002 875 2003 870 2004 870 2005 875 2006 885 2007 900 2008 920 2009 945 44.4444 2010 The following table shows the square errors, (Y-1), for forecasts from 2005 through 2009. Fill the table by calculating the root mean square error (RMSE) for each of the methods. Square Error Moving Average Exponential Smoothing Year (5-year) (3-year) (W = 0.9) (W = 0.3) 2005 25 9 25 25 2006 100 169 100 36 2007 625 529 256 361 2008 1,600 1,089 484 1,089 2009 3,025 1,849 729 2,304 RMSE Based on the RMSE criterion, which of the forecasting methods is the most accurate? Exponential smoothing (w = 0.9) ○ Exponential smoothing (w = 0.3) ○ Three-year moving average O Five-year moving average

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter5: Business And Economic Forecasting

Section: Chapter Questions

Problem 3E: Metropolitan Hospital has estimated its average monthly bed needs as N=1,000+9X where...

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