Carpet City Month 1 2 3 4 5 6 7 8 9 3 mos moving Demand for Soft Shag Carpet (1,000 yd.) average forecast 10 9 8 9 10 12 14 11 Weighted 3 mos moving average forecast Please apply weights stated in the problem Error abs() Error abs() Weights: 0.55 (most recent month), 0.35, 0.10 Compute MAD on 3 mos moving average Note: average over month 4 through 8 only. No data available to month 9 Compute MAD on weighted 3 mos moving average Note: average over month 4 through 8 only. No data available to month 9 Which is a better forecast method? Petroco Service Station alpha = 0.4 Month October November December January February March April May June July August Gas Demand 775 835 605 450 600 700 820 925 1500 1200 8410 MAPD Exp Forecast ---- Error SUM Science and Technology Mutual Fund alpha = Month Fund Price 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 55 3/4 54 1/4 55 1/8 58 1/8 53 3/8 51 1/8 56 1/4 59 5/8 62 1/4 59 1/4 62 3/8 58 58 1/8 62 3/4 64 3/4 66 1/8 68 3/4 60 1/2 65 7/8 72 1/4 Weighted 3 mos moving average 3 mos moving average forecast forecast ------------------- Please apply weights stated in the problem Compute MAD on 3 mos moving average Compute MAD on weighted 3 mos moving average Compute MAD on exponentially smoothed forecast Which is a better forecast method? 0.3 Exp Forecast ---- Weight 0.5 (most recent), 0.3, 0.2 3 mos Weighted 3 Exp. Smoothing MA error mos MA error error Carpet City Regression X - axis Y - axis Monthly Construction Permits Monthly Carpet Sales (1,000 yd.) 17 25 8 7 14 7 45 19 28 28 9 14 10 12 15 9 24 21 20 29 Place regression output here Y = A + Bx A= B= Forecast Carpet sales for 30 construction permits Correlation Coefficient Gilley's Ice Cream Parlor x Week 1 2 3 4 5 6 7 8 9 10 11 12 13 14 y Ave. Temp (degrees) 68 70 73 79 77 82 85 90 85 92 90 95 80 75 Ice cream Sold (gal.) 80 115 91 87 110 128 164 178 144 179 144 197 144 123 Place regression output here (a) Y = A + Bx A= B= (b) Correlation Coefficient (c') Coefficient of Determination Explain the meaning of the coefficient of Determination below. What does it indicate