Question1

a) What effect on the exponential smoothing model will increasing the smoothing constant have? [2 marks]

b) Given that a smoothing constant, =0.20, what does this mean regarding to our next forecast? [2 marks]

c) How is the moving average method similar to exponential smoothing? [2 marks]

d) The CBU athletic department wants to develop its budget for the coming year using a forecast for football attendance. Football attendance accounts for the largest portion of its revenues, and the athletic director believes attendance is directly related to the number of wins by the team. The business manager has accumulated total annual average attendance figures for the past eight years.

Wins Attendance

4 36'300

6 40,100

6 41,200

8 53,000

6 44,000

7 45,600

5 39,000

7 47,500

Given the number of returning starters and the strength of the schedule, the athletic director believes the team will win at least seven games next year. Develop a simple regression equation for this data to forecast attendance for this level of success. [10 marks]