Three years ago CMSV admissions office began using exponential smoothing with a smoothing constant of 0.25 to forecast the number of applications for admissions each year. Based on the previous experience, this process was begun with an initial estimate of 5000 applications. The actual number of applications turned out to be 4600 in the first year and grew to 5300 in the second year and 6000 last year. Determine the forecasts that were made for each of the past three years. Calculate MSE and MAD for these three years and determine the forecast for the next year.

Three years ago CMSV admissions office began using exponential smoothing with a smoothing constant of 0.25 to forecast the number of applications for admissions each year. Based on the previous experience, this process was begun with an initial estimate of 5000 applications. The actual number of applications turned out to be 4600 in the first year and grew to 5300 in the second year and 6000 last year. Determine the forecasts that were made for each of the past three years. Calculate MSE and MAD for these three years and determine the forecast for the next year.

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter13: Regression And Forecasting Models

Section13.6: Moving Averages Models

Problem 22P: The file P13_22.xlsx contains total monthly U.S. retail sales data. While holding out the final six...

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