Question

Sales (in thousands) of the new Thorton Model 506 convection oven over the eight-week period since its introduction have been as follows: Week Sales 1 18.6 2 21.4 3 25.2 4 22.4 5 24.6 6 19.2 7 21.7 8 23.8 a. Which exponential smoothing model provides better forecasts, one using a = .6 or a = .2? Compare them using mean squared error. b. Using the two forecast models in part (a), what are the forecasts for week 9?

Hi, I am using excel for this question I need to see all the work and steps and formulas.

Answer 1

Given data:

Week	Sales
1	18.6
2	21.4
3	25.2
4	22.4
5	24.6
6	19.2
7	21.7
8	23.8

a)

Forecast value for a=0.6

Week	Sales	Forecast Value a=0.6	MSE
1	18.6	18.6	0.0
2	21.4	18.6	7.8
3	25.2	20.3	24.2
4	22.4	23.2	0.7
5	24.6	22.7	3.5
6	19.2	23.9	21.7
7	21.7	21.1	0.4
8	23.8	21.4	5.5
Total	63.8

MSE for a=0.6,

Forecast value for a=0.2

Week	Sales	Forecast Value a=0.2	MSE
1	18.6	18.6	0.0
2	21.4	18.6	7.8
3	25.2	19.2	36.5
4	22.4	20.4	4.1
5	24.6	20.8	14.6
6	19.2	21.5	5.5
7	21.7	21.1	0.4
8	23.8	21.2	6.8
Total	75.7

MSE for a=0.2,

so the MSE of a=0.6 is less than MSE of a=0.2 so a=0.6 exponential smoothening forecast is accurate than a=0.2 exponential smoothening forecast.

b)

Forecast value for 9th week with a=0.6

Forecast value for 9th week with a=0.2

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