In: Statistics and Probability
For the data listed below, conduct following in Excel
i) Create a forecast with 4-day moving average,
ii) Create a forecast using exponential smoothing method with smoothing constant equal to 0.6,
iii) Compute Root Mean Squared Error (RMSE) and identify which of the two methods produces a forecast with better accuracy.
Day | Sales ('000 $) |
1 | 1735 |
2 | 1719 |
3 | 2025 |
4 | 1295 |
5 | 717 |
6 | 4317 |
7 | 2681 |
8 | 2669 |
9 | 6273 |
10 | 2049 |
11 | 2585 |
12 | 4895 |
13 | 2057 |
14 | 6955 |
15 | 2239 |
16 | 2369 |
17 | 6889 |
18 | 1697 |
19 | 309 |
20 | 715 |
21 | 5231 |
22 | 1503 |
23 | 1457 |
24 | 1785 |
25 | 2041 |
26 | 249 |
27 | 747 |