This assignment needs you to use Excel. Make sure to utilize the Assignment 5 template found in your online course when you turn in your answers.
Question 1
Conclude the error for each of the following forecasts. Calculate MAD as well as MSE.
Period Value Forecast Error
1 202 - -
2 191 202
3 173 192
4 169 181
5 171 174
6 175 172
7 182 174
8 196 179
9 204 189
10 219 198
11 227 211
Question 2
The U.S. Census Bureau issues data on factory orders for all manufacturing, durable goods as well as nondurable goods industries. Exposed here are factory orders in the United States over a 13-year period ($ billion).
a) Utilize these data to develop forecasts for the years 6 through 13 using a 5-year moving average
b) Utilize these data to develop forecasts for the years 6 through 13 using a 5-year weighted moving average. Weight the most current year by 6, the previous year by 4, the year previously that by 2, and the other years by 1.
c) Calculate the errors of the forecasts in parts (a) as well as (b) and then the MAD. Which forecast is better?
Year Factory Orders ($ billion)
1 2,512.7
2 2,739.2
3 2,874.9
4 2,934.1
5 2,865.7
6 2,978.5
7 3,092.4
8 3,356.8
9 3,607.6
10 3,749.3
11 3,952.0
12 3,949.0
13 4,137.0
Question 3
The ‘Economic Report to the President of the United States' comprised data on the amounts of manufacturers' new as well as unfilled orders in millions of dollars. Presented here are the figures for new orders over a 21-year period. Utilize Excel to develop a regression model to fit the trend effects for these data. Utilize a linear model and then try a quadratic model. How well does whichever model fit the data?
Year Total Number of New Orders
1 55,022
2 55,921
3 64,1 82
4 76,003
5 87,327
6 85,139
7 99,513
8 115,109
9 131,629
10 147,604
11 156,359
12 168,025
13 162,140
14 175,451
15 192,879
16 195,706
17 195,204
18 209,389
19 227,025
20 240,758
21 243,643