A Time Series for the Years 1990-1995 Is Shown Below

question 126

Essay

A time series for the years 1990-1995 is shown below. $$\begin{array} { | c | c | } \hline \text { Year } & y _ { t } \\\hline 1990 & 125 \\1991 & 115 \\1992 & 120 \\1993 & 126 \\1994 & 140 \\1995 & 122 \\\hline\end{array}$$ a. Develop forecasts for the years 1996-1998, with the following smoothing constant values:
w = 0.2, w = 0.5 and w = 0.6.
b. Compare each of the three sets of forecasts above with the actual values for 1996-1998 given in the following table, and compute the MAD for each model. Which model is best? $$\begin{array} { | c | c | } \hline \text { Year } & y _ { t } \\\hline 1996 & 130 \\1997 & 125 \\1998 & 135 \\\hline\end{array}$$

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Definitions:

Conditional Probability

The odds of an event taking place assuming another distinct event has occurred previously.

Joint Probability

The probability of two or more events happening at the same time, assuming there is some relationship between the events.

Complement Rule

A principle in probability theory stating that the probability of the complement of an event equals one minus the probability of the event itself.

Joint Probability

The probability of two events happening at the same time, represented as the intersection of the events in probability theory.