The demand for a certain raw material used in the manufacture of a piece of medical equipment varies from month to month. An organisation engaged in the manufacture of this equipment wants to place orders with the suppliers for the next month. The demand, for the component in the last six months (in metric tons) is as given in Table-1.

1. What is the forecast for the next month if a model which assigns a weight of 0.8 for the immediate past, 0.15 for two periods before and 0.05 for three periods before is built? 2. For the model fitted in Question-1, what are the different error measures? 3. If a regression model is fit for the data set, then what is the standard error of the model?

(please provide elaborated solution) (10 marks)

Month Demand Month-1 35 Month-2 10 Month-3 25 Month-4 25 Month-5 40 Month-6 35 Table-1: Demand of Raw Materials (in Metric Tons) over the past six months