problem 5

suited to each. (a) Plot the demand data for all three models, and suggest a forecasting model that might be (b) Find suitable constants for model 1. How good a predictor is the resulting model? (c) Find suitable constants for model 2. How good a predictor is the resulting model? 5. Can-Do Canoe sells lightweight portable canoes. Quarterly demand for its most popular (d) Find suitable constants for model 3. How good a predictor is the resulting model? product family over the past 3 years has been as follows: 1997 Year 1996 1998 Quarter Demand 1 25 2 120 3 40 4 60 1 30 2 140 3 60 4 80 1 35 2 150 3 55 4 90 and with oc=0.5 1)a 2)C=B+0.5 1) 2) Use an exponential smoothing model with smoothing constant a = 0.2 to develop a forecast for these data. How does it fit? What is the resulting MSD? (b) Use an exponential smoothing with a linear trend model with smoothing constants a = B = 0.2 to develop a forecast for these data. How does it fit? What is the resulting MSD? (c) Use the Winters method with smoothing constants a = B = y = 0.2 to develop a forecast for these data. How does it fit? What is the resulting MSD? (d) Find smoothing constants that minimize MSD over the second two years of data. How does the resulting forecast fit the data in the third year