# Question

Dell uses the CRS chip in some of its laptop computers. The prices for the chip during the past 12 months were as follows.

(a) Use a 2-month moving average on all the data and plot the averages and the prices.

(b) Use a 3-month moving average and add the 3-month plot to the graph created in part (a).

(c) Which is better (using the mean absolute deviation): the 2-month average or the 3-month average?

(d) Compute the forecasts for each month using exponential smoothing with and initial forecast for January of $1.80. Use α = .1, then α = .3, and finally α = .5. Using MAD, which α is thebest?

(a) Use a 2-month moving average on all the data and plot the averages and the prices.

(b) Use a 3-month moving average and add the 3-month plot to the graph created in part (a).

(c) Which is better (using the mean absolute deviation): the 2-month average or the 3-month average?

(d) Compute the forecasts for each month using exponential smoothing with and initial forecast for January of $1.80. Use α = .1, then α = .3, and finally α = .5. Using MAD, which α is thebest?

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