The Willow River Mining Company mines and ships coal. It has experienced the following demand for coal during the past eight years: Year Coal Sales (tonnes) 1 4260 2 4510 3 4050 4 3720 5 3900 6 3470 7 2890 8 3100 Develop an adjusted exponential smoothing model (α=0.30, β=0.20) and a linear trend line model, and compare the forecast accuracy of the two using MAD. Indicate which forecast seems to be most accurate.
The Willow River Mining Company mines and ships coal. It has experienced the following demand for coal during the past eight years: Year Coal Sales (tonnes) 1 4260 2 4510 3 4050 4 3720 5 3900 6 3470 7 2890 8 3100 Develop an adjusted exponential smoothing model (α=0.30, β=0.20) and a linear trend line model, and compare the forecast accuracy of the two using MAD. Indicate which forecast seems to be most accurate.
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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The Willow River Mining Company mines and ships coal. It has experienced the following demand for coal during the past eight years:
Year Coal Sales (tonnes)
1 4260
2 4510
3 4050
4 3720
5 3900
6 3470
7 2890
8 3100
Develop an adjusted exponential smoothing model (α=0.30, β=0.20) and a linear trend line model, and compare the
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Step 1: We first need to calculate the initial level, initial trend and initial values of the error terms.
VIEWStep 2: Now we put all the values in the above formula
VIEWStep 3: Now, we have to develop linear trend line model
VIEWStep 4: We find mean absolute deviation between actual demand and forecasted demand
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