Time series Analysis

Suppose you, as manager of Boston BBQ, would like to help one of your stores forecast their demand for pork on a stick which exhibits a horizontal pattern. This store has previously used a naïve forcast. You have 2 years of quarterly data shown below. Extra columns are provided if you would like to use them for your work. ROUND ALL FORECASTS TO THE NEAREST WHOLE NUMBER

Year     Quarter         Sales

1                    1505

1           2                    1469

3                    1516

4                    1435

2         1                       1579

2                       1499

3                       1536

4                       1463

A) Develop a forecast for year 2 ONLY using a moving average with k=3. Calculate the MAE, MSE, and MAPE for year 2 ONLY.

B) Develop a forecast for year 2 ONLY using a weighted moving average with k=3 and the following weights: wt = .5, wt-1 = .3, wt-k+1 = .2. Calculate the MAE, MSE, and MAPE for year 2 ONLY.

C) Develop a forecast for year 2 ONLY using exponential smoothing with α = .4. Calculate the MAE, MSE, and MAPE for year 2 ONLY.

D) Which of the 3 methods attempted in 5.1, 5.2, and 5.3 would you select and why?