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GB513 UNIT 5 SUCCESS GUIDE

GB 513 SUPPORT MATERIALS

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UNIT 5 SUCCESS GUIDE

1. As always, start by reading the chapters and studying the solved examples.

2. Watch my lecture video on forecasting in Course Documents. It is a comprehensive

video explaining just about everything in the assignment-moving averages, calculating

the errors, forecasting using graphs.

3. Watch the sample problem solutions in Course Documents.

4. If you want to see more videos on how to fit trendlines in scatter graphs (for problem #3)

watch this: http://www.youtube.com/watch?v=6rOlGbLeQxI.

5. If you want more on moving averages then:

6. If you want more on calculating the errors: http://www.youtube.com/watch?v=iRoEOU-

YYaU

Avoid these mistakes!

Problem 3 should be done using a scatter graph and fitted trend-lines. Some students try

to do multiple regression, which is a more complex and unnecessary way.

The questions below are very similar to what you need to solve in the Assignment.

Some, but not all, of these solutions were demonstrated on video and recorded

for the live binder by the math tutors.

SAMPLE PROBLEM 1 FOR ASSIGNMENT PROBLEM 1 Using the following data, determine the values of MAD and MSE. Which of these measurements

of error seems to yield the best information about the forecasts? Why?

Period Value Forecast

1 19.4 16.6

2 23.6 19.1

3 24.0 22.0

RESOURCES

COMMON MISTAKES IN THE ASSIGNMENT

SAMPLE PROBLEMS AND SOLUTIONS

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Solution

Period Value F e e2

Total 21.5 21.5 94.59

MAD = 21.5/6 = 3.583

MSE = 94.59/6 = 15.765

4 26.8 24.8

5 29.2 25.9

6 35.5 28.6

1 19.4 16.6 2.8 2.8 7.84

2 23.6 19.1 4.5 4.5 20.25

3 24.0 22.0 2.0 2.0 4.00

4 26.8 24.8 2.0 2.0 4.00

5 29.2 25.9 3.3 3.3 10.89

6 35.5 28.6 6.9 6.9 47.61

SAMPLE PROBLEM 1 FOR ASSIGNMENT PROBLEM 2 Please note that my lecture video covers this problem step by step.

Use the following time‐series data to answer the given questions.

Time Period Value Time Period Value

1 27 6 66

2 31 7 71

3 58 8 86

4 63 9 101

5 59 10 97

a. Develop forecasts for periods 5 through 10 using 4‐month moving averages.

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SOLUTION

a.)

4‐mo. mov. avg. error

b. Develop forecasts for periods 5 through 10 using 4‐month weighted moving averages. Weight

the most recent month by a factor of 4, the previous month by 2, and the other months by 1.

44.75 14.25

52.75 13.25

61.50 9.50

64.75 21.25

70.50 30.50

81.00 16.00

b.) 4‐mo. wt. mov. avg. error

53.25 5.75

56.375 9.625

62.875 8.125

67.25 18.75

76.375 24.625

89.125 7.875

c.) difference in errors

14.25 ‐ 5.75 = 8.5

3.626

1.375

2.5

5.875

8.125

In each time period, the four‐month moving average produces greater errors of forecast.

than the four‐month weighted moving average.

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SAMPLE PROBLEM 1 FOR ASSIGNMENT PROBLEM 3 The forecasting video demonstrates how to fit trendlines to scatter graphs.

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Resources

Corman, L. (2010, September 28). Trend lines and regression analysis in excel. Retrieved

from https://www.youtube.com/watch?v=6rOlGbLeQxI

East Tennessee State University. (2012, September 13). MAD and MSE calculations. Retrieved

from https://www.youtube.com/watch?v=iRoEOU-YYaU

East Tennessee State University. (2012, September 13). Weighted moving average.

Retrieved from https://www.youtube.com/watch?v=FQE6BdDRtnk