The Number of Plumbing Repair Jobs Performed by Auger's Plumbing

question 60

Essay

The number of plumbing repair jobs performed by Auger's Plumbing Service in each of the last nine months are listed below. $$\begin{array} { c c | c c | c c } \text { Month } & \text { Jobs } & \text { Month } & \text { Jobs } & \text { Month } & \text { Jobs } \\\hline \text { March } & 353 & \text { June } & 374 & \text { September } & 399 \\\text { April } & 387 & \text { July } & 396 & \text { October } & 412 \\\text { May } & 342 & \text { August } & 409 & \text { November } & 408\end{array}$$
a.Assuming a linear trend function, forecast the number of repair jobs Auger's will perform in December using the least squares method.
b.What is your forecast for December using a three-period weighted moving average with weights of .6, .3, and .1? How does it compare with your forecast from part (a)?

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Definitions:

Black-Scholes Option

A mathematical model used to price European options and derivatives by estimating the variation over time of financial instruments.

Implied Volatility

The market's forecast of a likely movement in a security's price, often derived from the price of its options.

Binomial Option Model

A mathematical model used to price options by breaking down the option's life into discrete time intervals and calculating the value at each step.

Interest Rate

The percentage of a sum of money charged for its use, typically expressed as an annual percentage on a loan or investment.