In: Finance
The following is average weekly per pound price data for apple pears in the US (from usda.gov) starting May. Your employer wants you to determine forecasted average weekly price for all the weeks starting in May.
Week of (2019 Calendar Year) |
Actual ($/lb) |
Naïve Previous Period ($/lb) |
Moving Average ($/lb) |
Weighted Moving Average ($/lb) |
Exponential Smoothing ($/lb) |
May 6 |
1.72 |
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May 13 |
2.43 |
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May 20 |
2.99 |
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May 27 |
1.72 |
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June 3 |
1.59 |
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June 10 |
3.50 |
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June 17 |
3.50 |
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June 24 |
1.50 |
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July 1 |
1.50 |
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July 8 |
1.59 |
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July 15 |
2.49 |
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July 22 |
2.49 |
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July 29 |
1.99 |
To receive any credit for filling out the above table, you must show your hand written work on attached pages. You should also double check your work using Excel (Excel for forecasting won’t be graded).
Naïve Same Period |
Four- period moving average |
Weighted Moving Average |
Exponential Smoothing |
|
Error Summary |
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MAD ($/lb) |
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MSE [($/lb)2] |
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MAPE (%) |
Ans (a) Naïve previous period = Actual Value of Previous Week
Price at any point of time Pt = P t-1
Ans (b)
Four-period moving average = Moving Avg of Past Four Period
Price at any point of time Pt =( P t-1 + P t-2 + P t-3 + P t-4 ) / 04
Ans (c)
Four-period weighted moving average (w1=0.35, w2=0.3, w3=0.25, w4=0.10).
Price at any point of time Pt = 0.35 * P t-1 + 0.3* P t-2 + 0.25 * P t-3 + 0.1 * P t-4
Ans (d)
Exponential smoothing with an α = .35.
Here forecasted value of May 20
forecasted Price Ft = α * Pt-1 + (1- α ) * Ft-1