Joey is managing a sustainability consulting business she


Joey is managing a sustainability consulting business. She would like to predict what revenues will be for October 2016. She has monthly data for the past 12 months.

Please complete the following:

• Calculate the forecast for October 2016 (and all earlier months as appropriate) using a 4-period moving average.

• Calculate the forecast for October 2016 (and all earlier months as appropriate) using a 3-period weighted moving average where the most recent weight is 0.5 and 2nd most recent is 0.4.

• Calculate the forecast for October 2016 (and all earlier months as appropriate) using exponential smoothing. Pick the alpha that gives the BEST forecast (with respect to MAD), out to 1 decimal place only, please. Initialize the forecast by having November 2015’s forecast = October 2015’s actual revenues.

• Calculate the forecast for October 2016 (and all earlier months as appropriate) using the simple naïve method. (1 point) • Calculate MAD for each of these 4 forecasts.

• On a separate page, create one Excel chart that shows: Revenues from October 2015 onward AND all 4 forecasts for October 2016 and earlier months as appropriate.

Month-Yr Revenue (in 1,000s)

Oct-15 $80

Nov-15 $85

Dec-15 $95

Jan-16 $90

Feb-16 $85

Mar-16 $90

Apr-16 $70

May-16 $80

Jun-16 $85

Jul-16 $85

Aug-16 $90

Sept. 16 $80

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