Question: QUESTION 3 (20 Marks) Maxpro uses the ZX-81 chip in some of its laptop computers. The prices for the chip during the past 12 months

QUESTION 3 (20 Marks)

Maxpro uses the ZX-81 chip in some of its laptop computers. The prices for the chip during the past 12 months were as follows:

Month	Price per Chip	Month	Price per Chip
January	R1.80	July	R1.80
February	R1.67	August	R1.83
March	R1.70	September	R1.70
April	R1.85	October	R1.65
May	R1.90	November	R1.70
June	R1.87	December	R1.75

3.1 Use a 2-month moving average on all the data and plot the averages and the prices (4 marks) 3.2 Use a 3- month moving average and add the 3-month plot to the graph created in Part (3.1). (4 marks) 3.3 Which is better (using the mean absolute deviation) the two-month average over the three-month average? (6 marks) 3.4 Compute the forecast for each month using exponential smoothing with an initial forecast for January of R1.80. Use smoothing constant of 0.1 and then 0.3 and finally 0.5. Using MAD which smoothing constant is the be best (6 marks)

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