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    Forecast personnel expenses for year 20X5

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    The following data represent total personnel expenses for the Palmdale Human Service Agency for past four fiscal years:

    20X1 $5,250,000
    20X2 $5,500,000
    20X3 $6,000,000
    20X4 $6,750,000

    Forecast personnel expenses for fiscal year 20X5 using moving averages, weighted moving averages, exponential smoothing, and time series regression. For moving averages and weighted moving averages, use only the data for the past three fiscal years. For weighted moving averages, assign a value of 1 to the data for 20X2, a value of 2 to the data for 20X3, and a value of 3 to the data for 20X4. For exponential smoothing, assume that the last forecast for fiscal year 20X4 was $6,300,000. You decide on the alpha to be used for exponential smoothing. For time series regression, use the data for all four fiscal years. Which forecast will you use? Why?

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    Solution Preview

    Please find the response to these questions in the attached excel file.

    I would use the Forecast given by Regression analysis as variation is best explained by the time about 95 % and significance F ...

    Solution Summary

    Forecast personnel expenses for year 20X5 for Palmdale Human Service Agency. The solution is calculated in an Excel file.