Purpose: At this point, you have experienced Chapter 5 from the Workbook, specifically Time Series forecasting methods aka models such as in Exercise 1 pages 124-130 (1.1 Nave model,

1. Moving Average, 1.3 Simple ExponentialSmoothing(SES) and 1.4 Choosingthe best technique)and also in Excel. You could also practice Exercise 2 next-just toget more comfortable if you need.

This assignment assesses and reinforces your ability to apply the above knowledge and skills and build these Time Series models so you can compare them based on the various errors they make and recommend the best model for a set of actual business data. This skill helps you to confidently build such models for any business forecasting the future where passage of time is used to determine what happens in the future!

You must save your work on this and on all other assignments in this course and keep them handy. Many prior students have told me these are great work they can show during job interviews, and interviewers have taken great interest which has led to students getting a job offer most times. This work could be useful for your current or future employer or consulting client or for yourself for your own business or any other curiosity.

This assignment directly links to the following learning outcomes from the syllabus:

Learning outcomes:

Which in turn will help achieve the course goals, in the context of profit making. (Future assignments will continue to build on other contexts.)

• Translate the business problem into ananalyticsproblem that canaidanalyzing, modeling and thus,supportingthedecisionmaking.

Your Task

Data collection: Collect onlyquarterly time series salesorrevenue dataofa realcompany ofyour choice, starting withquarter 1 ofthefirst year in yourdata(make sure you donotstart withquarters 2 or3-doingso will cause youtroublesin Assignment 3. So justdonotdoit and risk losing 10% onthis Assignment grade). You areallowed touse theinternet as a source for thisdata. (Forthis assignment monthly ordaily dataare notacceptable and theassignment receives a grade ofzero). Make sure youcollect exactly 40 quarters of data-noless, nomore.

That is, 10 years of data because it is quarterly (4 quarter per year, 10*4 = 40). The Walmart data that I have shared for practice- is NOT acceptable for this and the next assignment.

Then, do Time Series Forecasting models using the following four techniques:

1. Naive
2. Moving Average (3period)
3. ExponentialSmoothing(Alpha=0.25)
4. ExponentialSmoothing(Alpha=0.5)

There are various ways of doing time-series analysis, and many of them are partially flawed, especially those that are available on the internet. So, to harmonize and to make sure all of your learning is according to the goals of this course, you must do it according to the way it is done/discussed on the video/class.

Perform the following work:

1. Evaluate and compare each ofthefour methods bycomputingBias, MAD, MAPE, and MSE (or Standard Error). (Do a comparison table todothis task, usingsimilarformat toChapter 5, Exercise 1.4). Notcreating thiscomparison table loses 15% ofthepoints youearnfor thewholeassignment irrespective ofhowmuch textual writing you docomparingthem.
2. Based onthisevaluation, which method worked bestonyour data? (most likely thiswill beyour recommendation toyourclient). Make a clearrecommendation.
3. What would beyourforecast for thenext time period based on thatmethod?
4. Write a brief generalcommentary onBias, MAD, and MAPE describing whattheymean (i.e., their interpretation).-here noneed tospecifically address what were foundin A orBabove.

Deliverables:

1. (Grade 50%)Write a report in Word thatsummarizes youranalyses incorporating answers tothe abovethree items (A, B, and C).Copy any summary tables/charts/graphs from Excel as needed.Ideally thereport shouldstandalone. Answeritem D independent ofyourdata work. (Yourreport must bestructured byabovelettered items-A, B, etc. notdoing thiswill cost you10% of thegrade from thetotal gradeearned):

(A client may wish to see the Excel work, but should understand key points about what you did without looking at it).

1. (Grade 50%)Turn in theExcel spreadsheet, since I doneed tocheck that yourspreadsheet work is accurate and thenumbers in Word files based on byyourExcelwork.