ITIS IP97 FALL 2319 PROBLEM I: (36 marks) The Fowler Martial Arts Academy trains young boys and girls in self- defense. Joan Fowler, the owner of the academy, notes that monthly revenue is higher when school is in session but quite low when school is out (because many children are away on vacation or at summer camp). She has researched revenues for the past four years and obtained the information shown in the Table below. Answer the following questions based on the data provided in the table. Month Year I Year 2 Year 3 Year 4 January $59,042.00 $57,495.00 $56,583.00 $55,658.00 $62,659.00 $62,622.00 $66,433.00 $67,164.00 _$ $22 3,79. 00 $2,4 273. 00 $27,766. 00 $27, 795. 00 $29,946.00 $,30 492. 00 $31, 600. 00 $30, 667. 00 $26, 839. 00 $28, 237. 00 $29,589. 00 $31, 962. 00 $19,134.00 $17, 893. 00 $20,115.00 $21, 096. 00 $2,0 051.00 $21,126.00 $19, 324. 00 $22,773.00 $19 625 00 $22 3.76 00 $23, 436. 00 September $19,925.00 $22,641.00 $24,719.00 $26,601.00 October $53,435.00 $60,796.00 $60,666.00 $61,335.00 $37,705.00 $37,315.00 $36,693.00 $33,531.00 December $77,430.00 $78,711.00 $80,056.00 $81,048.00 a) Forecast the revenue for January of Year 5 using the moving averages method. Consider three different numbers of periods for the moving average calculation (4, 6, and 8 months). (6 marks) I. Do the forecasts for January Year 5 change if you change the number of periods to be used for calculating the moving average? Enumerate the three different forecasts for January Year 5. (I mark) 2. Plot both the actual revenue and the predicted revenue for all the three moving average calculations (Y on will have four plots in total on one chart). (1 mark} 3. Visually inspect the plots for all three of the moving average predictions (i.e. moving averages based on 4, 6, and 8 months}. a. What are the advantages of using a small number of periods in the moving average calculations? What are the disadvantages? {1 marks} b. What are the advantages of using a large number of periods in the moving average calculations? What are the disadvantages? {1 marks} 4. Which model 13 the best (the one based on a 4, 6, or 8 months moving average)? Why? Show your calculations. (2 marks) b) Forecast the revenue for January of Year 5 using the egponential smoothing method. Consider three different smoothing constants for the calculations: 0.3, 0.5, and 0.8. (6 marks] 1. Do forecasts for January Year 5 change if you change the smoothing constant values in your calculations? Enumerate the three different forecasts for January Year 5. (1 mark) 2. Plot both the actual revenue and the predicted revenues for all the three calculations (You will have four plots in total on one chart). (1 mark}