Two Accounting Questions

Sigchi4life
Category:
Accounting
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Question description

1. The following table reports the Consumer Price Index for the Los Angeles area on a monthly basis from January 1998 to December 2000 (base year = 1982–1984). Eliminating the data for 2000, use Excel to forecast the index for all of 2000 using a three- and six-month average. Which provides a better forecast for 2000 using the data provided?

3. Forecast the data for 2000 again in Problem 1 with exponential smoothing with w = 0.3 and w = 0.7. Is this a better forecast than the moving average? Note: For appendix problem 3, please compare RMSEs for moving average and exponential smoothing forecasts to answer “Is this a better forecast than the moving average?”

Note:

  1. Appendix problem 1: Delete “Eliminating the data for 2000.” You need to calculate the moving average forecasts and RMSEs for year 2000, not the whole data period.

2.  Appendix problem 3: Compare RMSEs for moving average and exponential forecasts to answer “Is this a better forecast than the moving average?” (see also p. 237). Use 166.63, the mean of all 36 months, as the initial forecast for Jan. 1998 for both exponential smoothing forecasts.


 Questions_for_Critical_Thinking_3_Chapter_6_Spreadsheet_1.xlsx 

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(Top Tutor) Daniel C.
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