The Following Times Series Shows the Demand for a Particular

question 33

Essay

The following times series shows the demand for a particular product over the past 10 months. $$\begin{array} { | c | c | } \hline \text { Month } & \text { Value } \\\hline 1 & 324 \\\hline 2 & 311 \\\hline 3 & 303 \\\hline 4 & 314 \\\hline 5 & 323 \\\hline 6 & 313 \\\hline 7 & 302 \\\hline 8 & 315 \\\hline 9 & 312 \\\hline 10 & 326 \\\hline\end{array}$$
a. Use α = 0.2 to compute the exponential smoothing values for the time series. Compute MSE and a forecast for month 11.
b. Compare the three-month moving average forecast with the exponential smoothing forecast using α = 0.2. Which appears to provide the better forecast based on MSE?

---

Definitions:

Accounts Payable

Accounts Payable is a liability account that tracks the amounts a company owes to suppliers or creditors for goods and services received but not yet paid for.

Sales Revenue

The income received by a company from its sales of goods or the provision of services before any costs or expenses are deducted.

Accounts Payable

Liabilities of a business that represent the company's obligation to pay off a short-term debt to its creditors or suppliers.

Inventory

The complete inventory of products and materials a company possesses, meant for sale or to be used in manufacturing.