WILLING TO NEGOTIATE !! HELLO, THESE ASSIGNMENTS ARE FOR A QUANTITATE METHODS CLASS!! (QMB3600) THERE IS AN EXCEL WORKSHEET WHERE YOU PLUG IN THE NUMERS FROM THE WORD HOMEWORK ASSIGNMENTS AND THEN A
Homework 6
1) The following are corporate AAA bond interest rates for the last 12 months: 9.5, 9.3, 9.4, 9.6, 9.8, 9.7, 9.8, 10.5, 9.9, 9.7, 9.6, and 9.6.
a) Develop a three- and four-month moving average for this time series. Which moving average provides the better forecast? Why?
b) Based on your decision in part a, what is the forecast for bond interest rates for next month?
2) The sales of vacuum cleaners at Lowenthal’s Industrial Supply over the last thirteen months are given below.
| Month | Sales | Month | Sales |
| 12 | 14 | ||
| 14 | 17 | ||
| 16 | 10 | 12 | |
| 10 | 11 | 14 | |
| 15 | 12 | 16 | |
| 17 | 13 | 11 | |
| 11 |
a) Use a weighted moving average for three periods to forecast sales for next month. Use a weight of 3 for the most recent period, 2 for the middle period, and 1 for the third previous period. What is the forecasted number of vacuum sales for next month?
b) Use a weighted moving average for three periods to forecast sales for next month. Use a weight of 4 for the most recent period, 3 for the middle period and 2 for the third previous period. What is the forecasted number of vacuum sales for next month?
c) Which forecast of sales should Lowenthal use and why?
3) The following data is the unemployment rate in a metropolitan community over the last 10 years. Use exponential smoothing with a smoothing constant of a = 0.2, 0.4, 0.6, and 0.8 to find the best forecast for unemployment for next year. Using mean absolute deviation which forecast constant provides the best prediction of unemployment? Why?
| Year | Rate | Year | Rate |
| 7.2 | 5.5 | ||
| 7.0 | 6.7 | ||
| 6.2 | 7.4 | ||
| 5.0 | 6.8 | ||
| 5.3 | 10 | 6.1 |
4) Use the following data from the DJIA to answer the questions below.
| Year | DJIA | Year | DJIA |
| 2013 | 13,104 | 2003 | 8,342 |
| 2012 | 12,392 | 2002 | 10,022 |
| 2011 | 11,577 | 2001 | 10,791 |
| 2010 | 10,431 | 2000 | 11,502 |
| 2009 | 8,772 | 1999 | 9,213 |
| 2008 | 13,262 | 1998 | 7,908 |
| 2007 | 12,460 | 1997 | 6,448 |
| 2006 | 10,718 | 1996 | 5,117 |
| 2005 | 10,784 | 1995 | 3,834 |
| 2004 | 10,453 | 1994 | 3,754 |
a) Use trend line analysis to develop a forecast for 2014, 2015 and 2016.
b) Use exponential smoothing with trend to develop a forecast for 2014. Use a = 0.8 and b = 0.2.
c) Compare the linear trend and exponential smoothing using MSE. Which forecasting technique should you use and why?
5) Mayfair Department Store was shut down during the months of July and August due to severe flooding in the downtown area. The store’s insurance policy provides revenues to the department store in cases of natural disaster. Sales data for the preceding 6 months are listed below.
| Month | Sales (1,000s) | Month | Sales (1,000s) |
| January | 184.72 | April | 210.36 |
| February | 167.84 | May | 255.57 |
| March | 205.11 | June | 261.19 |
a) Develop a forecast for July and August using exponential smoothing with a = 0.4. (Hint: use the July forecast as actual sales for July in developing the August forecast.) Comment on the use of exponential smoothing for forecasts more than one period in the future.
b) Use linear trend to predict sales for July and August. What are the forecasted amounts?
c) Mayfair’s insurance company has offered $240,000 per month for the lost sales. Should Mayfair accept the settlement offer? Why? If Mayfair should reject the offer, what is the amount that Mayfair should make as a counter offer?
