Share
Explore BrainMass

Forecasting using moving averages and exponential smoothing

The following data represent 15 quarters of manufacturing capacity utilization (in percentages)

QTR/YR Utilization
1/2000 82.5
2/2000 81.3
3/2000 81.3
4/2000 79.0
1/2001 76.6
2/2001 78.0
3/2001 78.4
4/2001 78.0
1/2002 78.8
2/2002 78.7
3/2002 78.4
4/2002 80.0
1/2003 80.7
2/2003 80.7
3/2003 80.8

a. Compute 3 & 4 qtr moving averages for this time series. Which moving average provides the better forecast for the 4th qtr of 2003?

b. Use smoothing constants of A = 0.4 and A = 0.5 to develop forecasts for the 4th qtr of 2003. Which smoothing constant provides the better forecast?

c. Based on the analysis in parts (a) and (b), which method- moving averages or exponential smoothing-provides the better forecast? Explain.
---

Attachments

Solution Summary

Forecasts are developed using moving averages and exponential smoothing (for different smoothing constants).

$2.19