Part 1 - Forecasting Models and Types of Data
There are different types of forecasting models that can be used in business research. Each model is suitable for a type of historical demand data. Some data may have a trend, may be without a trend, or may be seasonal.
- How can trendless data be evaluated?
- How does a trailing-moving average compare to a centered-moving average?
- When should exponential smoothing be used for data? Explain with an example.
- In exponential smoothing, what type of smoothing constant should be chosen for little smoothing compared with moderate smoothing?
Justify your answers using examples and reasoning. Comment on the postings of at least two peers and state whether you agree or disagree with their views.
Research Process
The research process is a well-structured methodology that aids the manager to make an educated business decision. The most important element of this process is the source of data used. The better the data, the better the result. Data must come from a sample that is random and large enough.
- What are the six stages in a research process?
- Which stage is the most difficult to complete? Why?
- Which stage is the most important? Why?
- How important is it to have accurate data?
Part 2 - Moving average forecasting models are powerful tools that help managers in making educated forecasting decisions. A moving average is mainly used to forecast short historical range data. This tool along with other forecasting tools is now computerized such as in Excel, which makes it easy to use. With regard to moving average forecasting, read the following task.
Obtain the daily price data over the past five years for three different stocks. Data can be obtained from the Internet by using the following keywords: stock price data, return data, company data, and stock returns.
- Create trend-moving averages with the following values form: 10, 100, and 200. Graph the data with Excel.
- Create centered-moving averages with the following values form: 10, 100, and 200. Graph the data with Excel.
- How do the moving averages for the same values of m compare between a trend-moving average and a centered-moving average?
- Explain how these moving averages can assist a stock analyst in determining the stocks' price direction. Provide a detailed explanation with justifications.