Average method to forecast sales price

HP uses X63 chip in their computers and prices for these chips for last 12 months are:

Month

Jan

Feb

Mar

Apr

May

Jun

July

Aug

Sep

Oct

Nov

Dec

Price ($)

1.80

1.67

1.70

1.85

1.90

1.87

1.80

1.83

1.70

1.65

1.70

1.75

Forecast next month (i.e. next Jan) sales price using each of the following:

  1. First use 2-month and then 3-month moving average method to forecast sales price. Using MAD approach, which average is better?
  2. If the initial Jan forecasts were also $1.80; in an exponential smoothing method, first use a = 0.1 and then a = 0.5; Using MSE approach, which value of a is better to predict sales price?
  3. In practice, both MAD and MSE can be used to find forecast accuracy giving the same decisions. Why would you choose one over the other? ( Can you explain how to do it by solving, not excel)

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