Reconsider the sales data for a certain product given in Prob. 27.5-4. The companys management now has
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T(a) The moving-average method based on the last four quarters, so start with a forecast for the fifth quarter.
T(b) The exponential smoothing method with α = 0.1. Start with a forecast for the third quarter by using the sales for the second quarter as the latest observation and the sales for the first quarter as the initial estimate.
T(c) The exponential smoothing method with α = 0.3. Start as described in part (b).
T(d) The exponential smoothing with trend method with α = 0.3 and β = 0.3. Start with a forecast for the third quarter by using the sales for the second quarter as the initial estimate of the expected value of the time series (A) and the difference (sales for second quarter minus sales for first quarter) as the initial estimate of the trend of the time series (B).
(e) Compare MSE for these methods. Which one has the smallest value of MSE?
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Related Book For
Introduction to Operations Research
ISBN: 978-1259162985
10th edition
Authors: Frederick S. Hillier, Gerald J. Lieberman
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