Forecasting

a) Based on the overhead cost data, forecast the overhead costs for week 53 using a simple moving average method based on 2-period and 3-period model.

b) Using appropriate forecasting accuracy measure, determine which model is more accurate in forecasting the overhead costs in week 53. Include a justification.

c) Using a simple linear regression, forecast the overhead costs in week 53. Determine whether the forecast based on the linear trend method is accurate.

Week 1 2 3 .. Labor Hours 695 531 839 379 602 807 515 Machine Hours 239 173 329 335 152 365 276 4 851 314 774 766 $37 642 434 741 995 675 935 638 1128 744 180 188 755 289 140 311 215 199 143 144 245 261 232 361 191 172 254 187 1014 Overhead 53421 44167 60085 55181 44484 68154 49415 63090 55935 56159 $1862 34799 42067 4910 55467 53907 64376 48639 77800 54077 29521 43676 51639 57315 35410 59348 47437 49433 55003 57783 57084 69759 51315 52124 62643 48950 $4092 58513 57237 36184 65824 44095 55454 36927 48322 39093 58789 70844 38749 60821 65585 77651 371 758 662 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 721 811 944 1184 1024 772 635 630 417 665 682 1046 887 706 $20 813 387 444 181 280 185 172 229 176 159 290 162 244 286 246 257 286 228 194 437 204 261 179 265 144 223 372 199 256 372 338 725 875 1026 407 815 706 1231