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Budgeting and Forecasting 278 Midterm 2014

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Budgeting and Forecasting 278 Midterm 2014 (TCO 1) The type of budget that is updated on a regular basis is known as a _____. Student Answer: continuous budget revised budget updated budget flexible budget TCO 2) The quantitative forecasting method that uses actual sales from recent time periods to predict future sales, assuming each period has equal influence on the prediction of future sales, is the _____. Student Answer: moving average model weighted moving average model exponential smoothing model equal average model (TCO 3) Before performing linear regression, it is important to ensure that a linear relationship exists between the dependent and independent variables by plotting observed …show more content…

The following table shows the national voter turnout as a percentage of the voting age population from 1972 to 1996 (The Wall Street Journal Almanac, 1998). Voter Turnout Year % Turnout Year % Turnout 1972 55 1986 36 1974 38 1988 50 1976 54 1990 37 1978 37 1992 55 1980 53 1994 39 1982 40 1996 49 1984 53 Part (a): Use exponential smoothing to forecast this time series. Consider smoothing constants of a = 0.1 and 0.2. What is the forecast of the percentage of turnout in 1998? Part (b): Use the mean absolute deviation (MAD) to determine which smoothing constant provides the best forecast of voter turnout. Part (a): Using an Excel spreadsheet, the forecasted percentage of voter turnout in 1998 is 48.02% using a smoothing constant of 0.1 and 46.14% using a smoothing constant of 0.2. Part (b) Using an Excel spreadsheet, the MAD for a smoothing constant of 0.1 is 7.11 and the MAD for a smoothing constant of 0.2 is 7.69. Therefore, the smoothing constant of 0.1 provides the best forecast of voter turnout. FOR WRITEN RESPONSES, PLEASE PARAPHRASE ASWERS AS THEY ARE INSTRUCTOR GUIDELINES. (TCO 3) Use the table “Food and Beverage Sales for Jimmy’s Greek Restaurant” to answer the questions below. Food and Beverage Sales for Jimmy’s Greek Restaurant ($000s) Month First Year Second Year January 242 263 February 235 238 March

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