understanding of the forecasting methods Assignments | Custom Homework Help
This assignment assesses your understanding of the forecasting methods you have learned this week and gives you an opportunity to compare and evaluate the results of different forecasting methods.
Submit your answers to all questions in a Word document. Download the data sets and use Excel to solve the problems.
Question: Download the data on restaurant sales.
Calculate both the three-month and the five-month averages for these data.
Plot the data to examine the possible existence of trend and seasonality.
Prepare the following two (2) separate forecasting models to examine the restaurant sales data using monthly data:
An exponential smoothing model (α=0.38, smoothing constant for the level)
Holt’s model (α=0.04, smoothing constant for the level; β=0.07, smoothing constant for the trend)
d. Examine the accuracy of the forecast given by each model ( four models: MA 3, MA 5, Simple Exponential smoothing, and Holt’s Method) by calculating the root mean square error (RMSE) for each during the historical period.
e. Which model does minimize the RMSE? Carefully explain which characteristics of the original data caused one of these models to minimize the RMSE.
f. Using Holt’s method forecast 12 months of restaurant sales for 2017.
Submit your answers in a Word document.
Submit the Excel files to show your calculations.
Include the relevant graphs of actual and forecast values of the series. Please do not forget to title your graph.
Wilson, J. H., & Keating, B. P. (2019). Forecasting and Predictive Analytics With forecastX TM (7th ed.). New York: McGraw-Hill.
Chapter 1: Introduction to Business Forecasting and Predictive Analytics
Avercast, LLC. (2015, December 8). Forecasting methods overview [Video file] [4 min 43 sec]. Retrieved from https://www.youtube.com/watch?v=fp-1_9mLlbc
Avercast, LLC. (2015, December 14). Naive forecasting – forecasting methods [Video file] [4 min 52 sec]. Retrieved from https://www.youtube.com/watch?v=sR6gtBUht0M
The Stats Files – Dawn Wright Ph.D. (2016, February 20). Use excel to calculate MAD, MSE, RMSE & MAPE – Evans chapter 7 [Video file] [7 min 43 sec]. Retrieved from https://www.youtube.com/watch?v=H_N5_vxs8Tg
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