(a) Suppose the data in the table below represents total revenues (in $ millions) for one real estate agency in the GTA. Fill in the 3-year Moving Averages, Weighted Moving Averages (with weights 5,3,2 starting from the most recent time period), and the Exponential Smoothing Forecast values in the table below: Round your answers in part (a) to 2 decimal places. Year Revenue 3-Year Moving Averages Weighted Moving Averages Exponential Smoothing α=0.35α=0.35 2016 4.7       2017 4.9       2018 5.4       2019 5.9

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(a) Suppose the data in the table below represents total revenues (in $ millions) for one real estate agency in the GTA. Fill in the 3-year Moving Averages, Weighted Moving Averages (with weights 5,3,2 starting from the most recent time period), and the Exponential Smoothing Forecast values in the table below:


Round your answers in part (a) to 2 decimal places.

Year Revenue 3-Year Moving Averages Weighted Moving Averages Exponential Smoothing α=0.35α=0.35
2016 4.7      
2017 4.9      
2018 5.4      
2019 5.9      
2020 6.7      
2021 7.9      
2022 Forecast        

 

Round your answers in part (b) to 2 decimal places, and round the MAD/MAE to 3 decimal places.

(b) Calculate the MAD/MAE for 3-year Moving Averages for 2019-2021 (use results from the previous problem).

Year Revenue 3-Year Moving Averages Absolute Error
2016 4.7    
2017 4.9    
2018 5.4    
2019 5.9    
2020 6.7    
2021 7.9    
    MAD/MAE =  



Round your answers in part (c) to 2 decimal places, and round the MAD/MAE to 3 decimal places.

(c) Calculate the MAD/MAE for Weighted Moving Averages for 2019-2021 (use results from the previous problem with weights 5,3,2 starting from the most recent time period).

Year Revenue Weighted Moving Averages Absolute Error
2016 4.7    
2017 4.9    
2018 5.4    
2019 5.9    
2020 6.7    
2021 7.9    
    MAD/MAE =  



(d) Based on the results (b)-(c), which method provides a better forecast of the revenue for 2019-2021? 

  • Weighted Moving Averages, since the MAD/MAE for Weighted Moving Averages is less than the MAD/MAE for 3-Year Moving Averages.
  • 3-Year Moving Averages, since the MAD/MAE for 3-Year Moving Averages is less than the MAD/MAE for Weighted Moving Averages.
  • Weighted Moving Averages, since the MAD/MAE for Weighted Moving Averages is greater than the MAD/MAE for 3-Year Moving Averages.
  • 3-Year Moving Averages, since the MAD/MAE for 3-Year Moving Averages is greater than the MAD/MAE for Weighted Moving Averages.
  • None of the above.
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