OPRE 3310: Homework Assignment (return before Oct 16, 2020, 23:59pm, on E- Learning) QI. (10 points) Dell uses the CR5 chip in some of its laptop computers. The prices for the chip during the past 6 months were as follows: Month Price per Chip 1.78 2 1.67 3 1.70 1.75 5 1.70 1.67 a. Use nave forecast to forecast the price per chip from month 2 to month 6. (2.5 points) Month Price per Chip Forecast 1.78 1.67 3 1.70 1.75 5 1.70 6 1.67 2 4 Forecast b. Use weighted moving average F = 0.44-1 +0.3A-2 +0.2A2-3 + 0.1A-4 to forecast price per chip from month 5 to month 6. (2 points) Month Price per Chip 1.78 1.67 3 1.70 1.75 1.70 1 2 4 5 6 1.67 c. Use exponential smoothing with a = 0.5 to forecast price per chip from month 2 to month 6. Assume month 2 forecast is done using a nave forecast. (2.5 points) Month Price per Chip Forecast Error 1 1.78 2 1.67 3 1.70 1.75 Page 1 of 2 5 6 1.70 1.67 error d. Compute the MSE for weighted moving average forecast in part b and exponential smoothing forecast in part c. Which forecast is better? (3 points) Month Price per Weighted Squared exponential Squared Chip moving average error smoothing 1 1.78 2 1.67 3 1.70 1.75 5 1.70 1.67 MSE 4 6