Answered Essay: Show your work! For this assignment IHIGHLY RECOMMEND working in groups up to four people and using Excel to do the forecasting spreadsheet program)

Show your work! For this assignment IHIGHLY RECOMMEND working in groups up to four people and using Excel to do the forecasting spreadsheet program), print out the sheet of results, as well as a sheet containing the formulas that you used (click Formulas->Formula Auditing> Show Formulas). Excel formatting can sometimes be difficult, and because of that there will be 5 points for “professionalism” on this assignment. problem below. If you choose to use an Excel spreadsheet (or another I. For this forecasting assignment you are going to compare linear regression against exponential smoothing for the data below. The data is monthly demand for the past 12 months. Demand 1000 1050 975 1022 1055 1098 1100 1200 1095 1150 1220 1175 Month 4 7 12 (5 points) What is the linear regression equation using the data from the last I2 months? (use 3 decimals for slope and intercept) a)

Expert Answer

Answer to Question a :

We insert the values of Month and demand in two different columns in excel.

Let, the Linear regression equation :

Y = a + b.X

Y = Value of demand

X = Month

.a and b are constants

Then,

We apply the formula ,

Linest ( ) in excel and obtain following values :

.a = 19.167

.b = 970.409

Accordingly, we obtain linear regression equation :

Y = 19.167 + 970.409.X

Answer to question b and d :

Refer below table .

Using above formula , forecasted values of month 1 to 12 are presented below .

For each data , Absolute Deviation is calculated as Absolute Value of difference between Forecasted value and Actual Value.

Mean Absolute deviation ( MAD ) is calculated as

= Sum of all deviations / 12 ( i.e. number of observations)

Accordingly , MAD = 29.833

Month Actual Value Forecast value Absolute deviation
1 1000 990 10
2 1050 1009 41
3 975 1028 53
4 1022 1047 25
5 1055 1066 11
6 1098 1085 13
7 1100 1105 5
8 1200 1124 76
9 1095 1043 48
10 1150 1162 12
11 1220 1181 39
12 1175 1200 25
MAD = 29.833

Answer to question c and d:

Formula for exponential smoothing as follows :

Ft = alpha x At + ( 1 – alpha ) x Ft-1

Ft = forecast for period t

Ft-1 = Forecast for period t-1

At = Actual value for period t-1

Alpha = smoothing factor = 0.25

Therefore,

Ft = 0.25.At-1 + 0.75.Ft-1

Using above formula , we obtained forecasted value against each month which are presented in below table :

Month Actual Value Forecast value Absolute deviation
1 1000 1000 0
2 1050 1000 50
3 975 1013 38
4 1022 1003 19
5 1055 1008 47
6 1098 1020 78
7 1100 1039 61
8 1200 1054 146
9 1095 1091 4
10 1150 1092 58
11 1220 1106 114
12 1175 1135 40
                                                                                                          MAD = 54.583

Next step is to calculate Absolute Deviation against each data and

Absolute deviation = Difference ( Actual Value – Forecast Value )

Mean Absolute Deviation ( MAD ) is calculated as = Sum of absolute deviations / 12 ( number of data)

Accordingly Mean Absolute Deviation ( MAD) = 54.583

Answer to question e:

The forecast which gives minimum error ( i.e. difference between actual and forecasted values) is considered to be the best and most accurate forecast since such forecasts best represents the actual values. The measure of error in this case is MAD. Therefore , the forecast which gives minimum MAD should be accepted as most appropriate forecast.

In the given case MAD of 29.833 basis linear regression equation is much less than MAD of 54.583 derived basis exponential smoothing function.

Therefore , we recommend to move forward with Linear Regression equation model

RECOMMENDATION : LINEAR REGRESSION EQUATION MODEL
Buy Essay
Calculate your paper price
Pages (550 words)
Approximate price: -

Help Me Write My Essay - Reasons:

Best Online Essay Writing Service

We strive to give our customers the best online essay writing experience. We Make sure essays are submitted on time and all the instructions are followed.

Our Writers are Experienced and Professional

Our essay writing service is founded on professional writers who are on stand by to help you any time.

Free Revision Fo all Essays

Sometimes you may require our writers to add on a point to make your essay as customised as possible, we will give you unlimited times to do this. And we will do it for free.

Timely Essay(s)

We understand the frustrations that comes with late essays and our writers are extra careful to not violate this term. Our support team is always engauging our writers to help you have your essay ahead of time.

Customised Essays &100% Confidential

Our Online writing Service has zero torelance for plagiarised papers. We have plagiarism checking tool that generate plagiarism reports just to make sure you are satisfied.

24/7 Customer Support

Our agents are ready to help you around the clock. Please feel free to reach out and enquire about anything.

Try it now!

Calculate the price of your order

Total price:
$0.00

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

HOW OUR ONLINE ESSAY WRITING SERVICE WORKS

Let us write that nagging essay.

STEP 1

Submit Your Essay/Homework Instructions

By clicking on the "PLACE ORDER" button, tell us your requires. Be precise for an accurate customised essay. You may also upload any reading materials where applicable.

STEP 2

Pick A & Writer

Our ordering form will provide you with a list of writers and their feedbacks. At step 2, its time select a writer. Our online agents are on stand by to help you just in case.

STEP 3

Editing (OUR PART)

At this stage, our editor will go through your essay and make sure your writer did meet all the instructions.

STEP 4

Receive your Paper

After Editing, your paper will be sent to you via email.

× How can I help you?