Question

Sara Lee Corp., maker of food, beverage, and household products, is known especially for its baked products, marketed under its corporate name. For the five years ending July 1 of each year from 2002 to 2006, their bakery division reported the following profits.
Fiscal Year Profits ($ M)
2002 ......... 97
2003 ......... 98
2004 ......... 156
2005 ......... – 4
2006 ......... – 197
a) Use a 4- year moving average to predict profits for 2007.
b) Predict the profits for 2007 using a single exponential smooth with smoothing parameter α = 0.5.
c) Think about the exponential smoother. If the parameter were 0.8 would you expect the prediction to be higher or lower? What if it were 0.2? Explain.


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  • CreatedMay 15, 2015
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