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Following are the number of victories for the Blue Sox and the hotel occupancy rate for the past eight years. You have been asked to test three forecasting methods to see which method provides a better forecast for the Number of Blue Sox Wins. Year Number of Blue Sox Wins Occupancy Rate 1 70 78% 2 67 83 3 75 86 4 87 85 5 87 89 6 91 92 7 89 91 8 85 94 For the following, you are to provide all forecasts to one decimal place (example, 93.2) You are asked to forecast the Number of Blue Sox Wins for Year 9. Although you believe there might be a linear regression relationship, your boss has told you to only consider the following three forecasting methods:
• 3-period weighted moving average given the weights of 0.5 for the most recent period and 0.1 for the third most recent period, and the remaining weight (s) consistent with this method as we have used in class, and • exponential smoothing with α = 0.25 and the best forecast available for the Number of Blue Sox Wins is for Year 3 which is 78.0. a) What is the forecast from each of these methods for Year 9? b) Which forecasting method provides the better forecast for Year 9? Why? Your selection criteria must be based on one of the numerical evaluation methods we have used on the homework this term using the forecast results for Year 4 through Year 8.
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