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The Following Data Shows the Quarterly Profit (In Thousands of Dollars)

question 26

Essay

The following data shows the quarterly profit (in thousands of dollars) made by a particular company in the past 3 years.  Year  Quarter  Profit ($1000s) 114512511372145021492245237924543142325833703456\begin{array} { | c | c | c | } \hline \text { Year } & \text { Quarter } & \text { Profit (\$1000s) } \\\hline 1 & 1 & 45 \\\hline 1 & 2 & 51 \\\hline 1 & 3 & 72 \\\hline 1 & 4 & 50 \\\hline 2 & 1 & 49 \\\hline 2 & 2 & 45 \\\hline 2 & 3 & 79 \\\hline 2 & 4 & 54 \\\hline 3 & 1 & 42 \\\hline 3 & 2 & 58 \\\hline 3 & 3 & 70 \\\hline 3 & 4 & 56 \\\hline\end{array}
a. Use α = 0.3 to compute the exponential smoothing values for the time series. Compute MSE and the forecast of profit (in $1000s) for the next quarter.
b. Compare the three-period moving average forecast with the exponential smoothing forecast using α = 0.3. Which appears to provide the better forecast based on MSE?


Definitions:

Advance Directives

Written statement in which people gives instructions for their future medical care.

Typical

Characteristic of a particular person, group, situation, or thing; representing the usual or most common example.

Disinherited

The act of intentionally preventing someone from receiving inheritance or property from a will or estate.

Entire Estate

Refers to all the assets owned by an individual at the time of their death, including property, investments, and personal belongings.

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