Economic
chiato
unit_5_success_guide.pdf
UNIT 5 SUCCESS GUIDE
Dr. Altinoz
GB 513 SUPPORT MATERIALS
UNIT 5 SUCCESS GUIDE RESOURCES
1. As always, start by reading the chapters and studying the solved examples. 2. Watch my lecture video on forecasting in document sharing. It is a comprehensive video
explaining just about everything in the assignment-moving averages, calculating the errors, forecasting using graphs.
3. Watch the sample problem solutions in document sharing. 4. If you want to see more videos on how to fit trendlines in scatter graphs (for problem #3)
watch this: http://www.youtube.com/watch?v=6rOlGbLeQxI. 5. If you want more on moving averages then:
http://www.youtube.com/watch?v=FQE6BdDRtnk 6. If you want more on calculating the errors: http://www.youtube.com/watch?v=iRoEOU-
YYaU
COMMON MISTAKES IN THE ASSIGNMENT Avoid these mistakes!
Problem 3 should be done using a scatter graph and fitted trend-lines. Some students try to do multiple regression, which is a more complex and unnecessary way.
SAMPLE PROBLEMS AND SOLUTIONS The questions below are very similar to what you need to solve in the assignment. Some, but not all, of these solutions were demonstrated on video and recorded for the live binder by the math tutors.
S AM P L E PR O B L E M 1 F O R AS S I G N M E N T P R O B L E M 1 Using the following data, determine the values of MAD and MSE. Which of these measurements
of error seems to yield the best information about the forecasts? Why?
Period Value Forecast
1 19.4 16.6
2 23.6 19.1
3 24.0 22.0
4 26.8 24.8
5 29.2 25.9
6 35.5 28.6
Solution
Period Value F e e e2
1 19.4 16.6 2.8 2.8 7.84
2 23.6 19.1 4.5 4.5 20.25
3 24.0 22.0 2.0 2.0 4.00
4 26.8 24.8 2.0 2.0 4.00
5 29.2 25.9 3.3 3.3 10.89
6 35.5 28.6 6.9 6.9 47.61
Total 21.5 21.5 94.59
MAD = 21.5/6 = 3.583
MSE = 94.59/6 = 15.765
S AM P L E P R O B L E M 1 F O R AS S I G N M E N T P R O B L E M 2 Please note that my lecture video covers this problem step by step.
Use the following time‐series data to answer the given questions.
Time Period Value Time Period Value
1 27 6 66
2 31 7 71
3 58 8 86
4 63 9 101
5 59 10 97
a. Develop forecasts for periods 5 through 10 using 4‐month moving averages.
b. Develop forecasts for periods 5 through 10 using 4‐month weighted moving averages. Weight
the most recent month by a factor of 4, the previous month by 2, and the other months by 1.
S O L U T I O N
a.) 4‐mo. mov. avg. error
44.75 14.25
52.75 13.25
61.50 9.50
64.75 21.25
70.50 30.50
81.00 16.00
b.) 4‐mo. wt. mov. avg. error
53.25 5.75
56.375 9.625
62.875 8.125
67.25 18.75
76.375 24.625
89.125 7.875
c.) difference in errors
14.25 ‐ 5.75 = 8.5
3.626
1.375
2.5
5.875
8.125
In each time period, the four‐month moving average produces greater errors of forecast
than the four‐month weighted moving average.
S AM P L E PR O B L E M 1 F O R AS S I G N M E N T P R O B L E M 3 The forecasting video demonstrates how to fit trendlines to scatter graphs.
