INFO 564 South Shore Construction Time Series Forecasting Paper

### Question Description

This work must be done completely in EXCEL.Answer each question on a separate tab.Label each tab appropriately. You can copy and paste the data given into an Excel worksheet.

South Shore Construction builds permanent docks and seawalls along the southern shore of Long Island, New York. The following data show quarterly sales revenues (in \$’000s) for the past 5 years.

 Quarter Year 1 Year 2 Year 3 Year 4 Year 5 1 20 37 75 92 176 2 100 136 155 202 282 3 175 245 326 384 445 4 13 26 48 82 181

Question 1

Plot this data with quarters from years 1-5 on the horizontal axis. What components do you see in this time series?

Question 2

Ignore any trend or seasonality in the data.

• Suppose the company uses moving averages to make forecasts.Make forecasts all the way through Q4 Year 5.Assume the company uses (i) 3-quarterly moving averages and (ii) 4-quarterly moving averages.
• Compare the two sets of forecasts from (a) on the basis of Mean Absolute Percent Deviation.Which is more accurate – 3 quarterly moving average or 4 quarterly moving average?
• On a line chart plot the time series along with the forecasts from the method you select in (b).

Question 3

Ignore any trend or seasonality in the data.

• Suppose the company uses weighted moving averages to make forecasts.What are the forecasts starting with Q4 Year 1 all the way through Q4 Year 5?Assume the company uses (i) 3-quarterly moving averages with weights 0.6, 0.3, and 0.1 and (ii) 4-quarterly moving averages with weights 0.4, 0.3, 0.2, and 0.1.In both cases the most weight is given to the most recent quarter and the least to the oldest quarter in the moving average.
• Compare the two sets of forecasts from (a) on the basis of Mean Absolute Percent Deviation.Which is more accurate – 3 quarterly weighted moving average or 4 quarterly weighted moving average?
• On a line chart plot the time series along with the forecasts from the method you select in (b).

Question 4

Again ignore any trend or seasonality in the data.

• Suppose the company uses exponential smoothing to make forecasts.What are the forecasts for periods Q2 Year 1 through Q4 Year 5 assuming (i) alpha = 0.3 and (ii) alpha = 0.7?In both cases assume that the forecast for Q1 Year 1 was 25 units.
• Compare the two sets of forecasts from (a) on the basis of Mean Absolute Percent Deviation.Which is more accurate – alpha of 0.3 or alpha of 0.7?
• On a line chart plot the time series along with the forecasts from the method you select in (b)

Question 5

Now make adjustments for trend and seasonality.

• Quantify the trend in the time series.What does the trend equation tell you?
• Quantify the seasonality in the time series by calculating seasonality indexes.What do these indexes tell you?
• Using the trend and the seasonality information from (a) and (b) make forecasts from Q1 Year 1 through Q4 Year 5.
• Calculate the Mean Absolute Percent Deviation for the forecasts in (c).
• On a line chart plot the time series along with the forecasts from (c).

Question 6

Using the most accurate method of all of the above,

• Make forecasts for the four quarters of Year 6.
• Plot these forecasts on the same line chart as the time series.

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Outline

Question 1:

The time series dipicts
an upword tred for the
three quarters of every
year and a downword
trend for all fourty
quarter og every
year.this means sales is
when the year starts
sales do increase p to
the month of august
then starts to decline.

450
400
350
300

Axis Title

Quarterly Sales Revenues for South Shore Construction
Year
Quarter
Sales (000's)
Year 1
1
20
2
100
3
175
4
13
Year 2
1
37
2
136
3
245
4
26
Year 3
1
75
2
155
3
326
4
48
Year 4
1
92
2
202
3
384
4
82
Year 5
1
176
2
282
3
445
4
181

250
200
150
100
50
0
1

2

3

Year 1

4

Sales (000's)

Sales (000's)

3
Year 1

4

1

2

3

Year 2

4

1

2

3

Year 3

4

1

2

3

Year 4

4

1

2

3

Year 5

4

Question :2 a
Quarterly Sales Revenues for South Shore Construction
3 Quarterly Moving Average Errors
Year
Quarter Sales (000's) MA 3
MA 4
Mean error
MAE
Year 1
1
20
2
100
3
175
4
13 98.33333
-85.33
85.33
Year 2
1
37
96
77
-59.00
59.00
2
136
75
81.25
61.00
61.00
3
245
62
90.25
183.00
183.00
4
26 139.3333
107.75
-113.33
113.33
Year 3
1
75 135.6667
111
-60.67
60.67
2
155 115.3333
120.5
39.67
39.67
3
326 85.33333
125.25
240.67
240.67
4
48 185.3333
145.5
-137.33
137.33
Year 4
1
92 176.3333
151
-84.33
84.33
2
202 155.3333
155.25
46.67
46.67
3
384
114
167
270.00
270.00
4
82
226
181.5
-144.00
144.00
Year 5
1
176 222.6667
190
-46.67
46.67
2
282
214
211
68.00
68.00
3
445
180
231
265.00
265.00
4
181
301
246.25
-120.00
120.00
19.02
119.10
Question 2:b
3 quarterly moving avarage
is more accurate as the
average per MAPE is lees
when compared to the
MAPE OF 4 quarterly moving
average

Moving Average Errors
MAPE

4 Quarterly Moving Average Errors
Mean error
MAE
MAPE

Question 2:c

Time Series plot of forcast Sales
656%
159%
45%
75%
436%
81%
26%
74%
286%
92%
23%
70%
176%
27%
24%
60%
66%
140%

450

-40.00
54.75
...

GeniousCoach (4033)
New York University
Review

Anonymous
Solid work, thanks.

Anonymous
The tutor was great. I’m satisfied with the service.

Anonymous
Goes above and beyond expectations !

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