Develop an Exponential Smoothing forecast for 2004 to 2013. Use a = 0.3. Make the appropriate assumption regarding the forecast for 2004. Calculate the MSE (using errors from 2005 through 2013) and Tracking Signal for this forecast.
Develop a Naïve forecast for 2005 to 2013. Calculate the MSE (using errors from 2005 through 2013) and Tracking Signal for this forecast.
1. What is your forecast (from the Exponential Smoothing method) for 2004?
48.3
47.3
46.8
None of the above
2. Which of the following values is closest to the forecast error for 2007 (Exponential Smoothing forecast)?
-0.5
0
-5
5
3. Which of the following values is closest to the MSE value for the Exponential Smoothing forecast?
529.8
50.5
58.9
-47.5
4. Which of the following values is closest to the MSE value for the Naïve forecast?
38.9
20.2
-26.6
350.5
5. Do you see evidence of bias in the forecast?
Yes
No