Alvin Ortega's Social Media Dream$*$

Case Note

Learning Objectives

Calculate and apply the quantitative forecasting techniques.

Mr$.$ Ortega is working on a social media platform similar to Twitter; however, his has some unique features that he believes will enable it to compete with Twitter. As he begins working on his business plan he decides he needs some real data to illustrate the potential of his creation. Unfortunately, since he hasn't launched his company yet, he has no data of his own. He searches the Internet and discovers data on statista ${?}^1,$ a website that provides statistical information on various industries. He searches for information on Twitter and finds data on the number of users per quarter from $2010$ through $2016.$ He is elated! Mr$.$ Ortega decides to use the data from $2010-2011$ to illustrate the potential he believes his social media platform could have. Although the numbers are Twitter users, he plans to explain that he used their historical user data as a baseline for forecasting his potential user base.

Alvin decides to test four different forecasting methods $-2-$quarter moving average, $3$quarter moving average, exponential smoothing with a smoothing constant of $0\mathrm{.}2,$ and exponential smoothing with a smoothing constant of $0\mathrm{.}9.$ Using the Twitter data as his baseline, Alvin wants to see which forecasting methods is the most accurate. Create a table to show your calculations for each of the four aforementioned methods.

Assess the accuracy and interpret the results of forecasts.

So which forecasting method was the best? The MADdest $($get it$?-$ calculate the MAD for each method$)?$ PS Use only the final $5$ periods for calculating your MAD because that will include the same amount of data for each technique.