Reference no: EM134605

This assignment needs you to use Excel. Make sure to utilize the Assignment 5 template found in your online course when you turn in your answers.

Question 1

Conclude the error for each of the following forecasts. Calculate MAD as well as MSE.

Period     Value     Forecast Error

1             202           - -
2             191         202
3             173         192
4             169         181
5             171         174
6             175         172
7             182         174
8             196         179
9             204         189
10           219         198
11           227         211

Question 2

The U.S. Census Bureau issues data on factory orders for all manufacturing, durable goods as well as nondurable goods industries. Exposed here are factory orders in the United States over a 13-year period ($ billion).

a) Utilize these data to develop forecasts for the years 6 through 13 using a 5-year moving average

b) Utilize these data to develop forecasts for the years 6 through 13 using a 5-year weighted moving average. Weight the most current year by 6, the previous year by 4, the year previously that by 2, and the other years by 1.

c) Calculate the errors of the forecasts in parts (a) as well as (b) and then the MAD. Which forecast is better?

Year Factory Orders ($ billion)

1        2,512.7
2        2,739.2
3        2,874.9
4        2,934.1
5        2,865.7
6        2,978.5
7        3,092.4
8        3,356.8
9        3,607.6
10      3,749.3
11      3,952.0
12      3,949.0
13      4,137.0

Question 3

The ‘Economic Report to the President of the United States' comprised data on the amounts of manufacturers' new as well as unfilled orders in millions of dollars. Presented here are the figures for new orders over a 21-year period. Utilize Excel to develop a regression model to fit the trend effects for these data. Utilize a linear model and then try a quadratic model. How well does whichever model fit the data?

Year       Total Number of New Orders
1                   55,022
2                   55,921
3                   64,1 82
4                   76,003
5                   87,327
6                   85,139
7                   99,513
8                   115,109
9                   131,629
10                 147,604
11                 156,359
12                 168,025
13                 162,140
14                 175,451
15                 192,879
16                 195,706
17                 195,204
18                 209,389
19                 227,025
20                 240,758
21                 243,643