Three years ago CMSV admissions office began using exponential smoothing with a smoothing constant of 0.25 to forecast the number of applications for admissions each year. Based on the previous experience, this process was begun with an initial estimate of 5000 applications. The actual number of applications turned out to be 4600 in the first year and grew to 5300 in the second year and 6000 last year. Determine the forecasts that were made for each of the past three years. Calculate MSE and MAD for these three years and determine the forecast for the next year.
Three years ago CMSV admissions office began using exponential smoothing with a smoothing constant of 0.25 to forecast the number of applications for admissions each year. Based on the previous experience, this process was begun with an initial estimate of 5000 applications. The actual number of applications turned out to be 4600 in the first year and grew to 5300 in the second year and 6000 last year. Determine the forecasts that were made for each of the past three years. Calculate MSE and MAD for these three years and determine the forecast for the next year.
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
Problem 1CE
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Three years ago CMSV admissions office began using exponential
smoothing with a smoothing constant of 0.25 to forecast the number of
applications for admissions each year. Based on the previous experience,
this process was begun with an initial estimate of 5000 applications. The
actual number of applications turned out to be 4600 in the first year and
grew to 5300 in the second year and 6000 last year.
Determine the forecasts that were made for each of the past three years.
Calculate MSE and MAD for these three years and determine the forecast
for the next year.
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