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You are employed at a nonprofit as an industrial and management engineer. You have access to historical monthly donation amounts. The nonprofit is interested in
You are employed at a nonprofit as an industrial and management engineer. You have access to historical monthly donation amounts. The nonprofit is interested in forecasting their monthly donations for the upcoming year so that they can plan what type of services they will offer in their local community. Use the initialization procedures that are the default in the R functions used in class notes.
Month | Period | Donations_Dollars |
19-Jan | 1 | 5126 |
19-Feb | 2 | 3031 |
19-Mar | 3 | 4621 |
19-Apr | 4 | 1296 |
19-May | 5 | 3075 |
19-Jun | 6 | 2053 |
19-Jul | 7 | 2098 |
19-Aug | 8 | 5376 |
19-Sep | 9 | 2467 |
19-Oct | 10 | 2441 |
19-Nov | 11 | 3324 |
19-Dec | 12 | 5596 |
20-Jan | 13 | 3623 |
20-Feb | 14 | 3048 |
20-Mar | 15 | 5499 |
20-Apr | 16 | 5258 |
20-May | 17 | 2473 |
20-Jun | 18 | 2719 |
20-Jul | 19 | 2661 |
20-Aug | 20 | 3079 |
20-Sep | 21 | 2468 |
20-Oct | 22 | 2468 |
20-Nov | 23 | 1195 |
20-Dec | 24 | 1216 |
21-Jan | 25 | 4901 |
21-Feb | 26 | 5353 |
21-Mar | 27 | 6116 |
21-Apr | 28 | 5869 |
21-May | 29 | 1069 |
21-Jun | 30 | 3089 |
21-Jul | 31 | 1621 |
21-Aug | 32 | 2181 |
21-Sep | 33 | 3046 |
21-Oct | 34 | 5315 |
- Conduct a 3-period moving average and provide your donation forecast for months 35 to 40.
- Conduct a simple exponential smoothing forecast and provide your donation forecast for months 35 to 40. Also, provide the 80% prediction interval and the 95% prediction intervals lower and upper bounds of your forecasts. What value(s) for this methods input parameters do you recommend? In your own words, explain your recommendation and how you obtained it.
- Use the largest subset of periods that is a fair comparison for both methods to provide the mean squared error (MSE) forecasting measure for your 3-period moving average and your exponential smoothing forecasting methods. Identify over what periods these MSE values are calculated over.
- Do you recommend using the 3-period moving average, the simple exponential smoothing forecast or neither of them to plan your nonprofits service commitments for the 6 months? In your own words, justify your answer. To receive full credit, you must justify your answer using quantitative evidence.
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