Economics -macro

  

Question 2:

An Electronic Company estimates the annual demand for a certain product as follows:

    Week               1              2               3               4                5               6 

 Demand          649            524           561         738              515            598 

a. Forecast the demand for week 7 using a five-period moving average? (Marks 1.5) (word count maximum:100)

b. Forecast the demand for week 7 using a three-period weighted moving average. Use the following weights: W1 = .4, W2 = .4, W3 = .2 (Marks 1.5) (word count maximum:100)

c. Forecast the demand for week 7 using exponential smoothing. Use α value of .1 and assume the forecast for week 6 was 602 units? (Marks 1.5) (word count maximum:100)

d. What assumptions are made in each of the above forecasts? (Marks 0.5) (word count maximum:150)