ASSIGNMENT #3

 For decimal answers, keep two decimal places; for percentages, round to the nearest percent.

 The data set file for this assignment is on the other sheet

Question

The following data represent the annual sales (in millions of dollars) for a food-processing company

for the years 2001 – 2017.

YEAR SALES YEAR SALES

2001 51.5 2010 36.4

2002 53.3 2011 38.4

2003 51.6 2012 42.6

2004 49.0 2013 34.8

2005 38.6 2014 28.4

2006 37.3 2015 23.9

2007 43.8 2016 27.8

2008 41.7 2017 42.1

2009 38.3

Use Excel or Excel Modules to do the following questions:

a) Compute the 4-year moving averages and forecast the Sales for 2018. (please keep the answers to 2 decimal places for all parts in this question)

b) Compute the 3-year weighted moving averages, using 4, 2, and 1 for the weights of the most recent, second most recent, and third most recent periods respectively. Calculate the forecast for 2018.

c) Using a smoothing coefficient of α = 0.35, compute the exponentially smoothed values for the data. Calculate the forecast for 2018.

d) Report the Mean Absolute Deviation (MAD or MAE) for each method in parts a) and b). Based on the MAD criterion, which method would be more accurate for forecasting? Why?