You are given the following information, comprising of an individuals expenses for the year 2018. Use the
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Question:
You are given the following information, comprising of an individual’s expenses for the year 2018. Use the information provided to forecast the expenses for the year 2019.
Month | Expenses |
January | 1988 |
February | 820 |
March | 970 |
April | 1094 |
May | 1220 |
June | 1281 |
July | 1400 |
August | 1788 |
September | 895 |
October | 2208 |
November | 1824 |
December | 1954 |
- Determine the expenses forecast using a two (2) period moving average.
- Determine the expenses forecast using a two (2) period weighted moving average. Use 0.8 & 0.5 for the weights of the most recent and second most recent periods respectfully.
- Develop an exponential smoothing forecast using α=0.1. Assume the forecast for the first month is the actual expenses for that month.
- Evaluate the accuracy of each method, using the MAD and MSE.
- Which forecasting method is the most accurate and why?
Expert Answer:
Determine the expenses forecast using a two 2 period moving average January 1094 February 1057 March 1128 April 1187 May 1279 June 1340 July 1495 August 1692 September 1641 October 2058 November 1989 ... View the full answer
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