BA $571-$ Fall $2024$ Question

Advanced Petrochemical has been monitoring the sales of its main product Polypropylene

$($PP$),$ and the historical quarterly$-$sales data for the past two years are shown in the table

below:

a$)$ Use the exponential smoothing method twice using two alpha values

$0\mathrm{.}2,{}_2=0\mathrm{.}8),$ and determine the forecasts starting from Q$2,2022$ through Q$1,$

$2024($in both cases assume Q$1,2022$ forecast is equal to its actual sales$).$

b$)$ Calculate the MAE and BIAS for both methods.

c$)$ Calculate the scaled MAE and scaled BIAS for both methods. $($hint: divide

your results from part $b$ by the average of actual data$)$

d$)$ Interpret your results from part $($c$)$ in plain English. Which alpha value is

better in terms of these two error measures? And why? $($hint: plot the

forecasts against the actual sales$)$

Assignment $1$

Question

Advanced Petrochemical has been monitoring the sales of its main product Polypropylene

$($PP$),$ and the historical quarterly$-$sales data for the past two years are shown in the table

below:

Year Quarter Sales $(000)($tons$)$

$2022$

Q$1200$

Q$2214$

Q$3211$

Q$4228$

$2023$

Q$1235$

Q$2232$

Q$3248$

Q$4250$

a$)$ Use the exponential smoothing method twice using two alpha values $(1=$

$0\mathrm{.}2,2=0\mathrm{.}8),$ and determine the forecasts starting from Q$2,2022$ through Q$1,$

$2024($in both cases assume Q$1,2022$ forecast is equal to its actual sales$).$

b$)$ Calculate the MAE and BIAS for both methods.

c$)$ Calculate the scaled MAE and scaled BIAS for both methods. $($hint: divide

your results from part b by the average of actual data$)$

d$)$ Interpret your results from part $($c$)$ in plain English. Which alpha value is

better in terms of these two error measures? And why? $($hint: plot the

forecasts against the actual sales$)$