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    Forecasting using moving averages and exponential smoothing

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    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.
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    https://brainmass.com/statistics/regression-analysis/forecasting-moving-averages-exponential-smoothing-56495

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    Solution Summary

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

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