BUS 644 Problem 6
Read Problem 6 in
Chapter 6 of your textbook. Calculate and answer parts a through d. Include all
calculations and spreadsheets in your post. Explain why the moving average
method was used instead of another forecasting method. What might be another
forecasting method that could prove to be just as useful? Your initial post should
be 200-250 words.
The figures below indicate the number of
mergers that took place in the savings and loan industry over a 12-year period.
Year | Mergers | Year | Mergers |
2000 | 46 | 2006 | 83 |
2001 | 46 | 2007 | 123 |
2002 | 62 | 2008 | 97 |
2003 | 45 | 2009 | 186 |
2004 | 64 | 2010 | 225 |
2005 | 61 | 2011 | 240 |
a.
Calculate a 5-year moving average to forecast
the number of mergers for 2012.
b.
Use the moving average technique to determine
the forecast for 2005 to 2011. Calculate measurement error using MSE and MAD.
c.
Calculate a 5-year weighted moving average to
forecast the number of mergers for 2012. Use weights of 0.10, 0.15, 0.20, 0.25,
and 0.30, with the most recent year weighted being the largest.
d.
Use regression analysis to forecast the
number of mergers in 2012.
2.
Find the exponentially smoothed series for
the series in Problem 6, (a) using A = 0.1 and then (b) using A =
0.7, and plot these time series along with the actual data to see the impact of
the smoothing constant.
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