(a) Suppose the data in the table below represents total revenues (in $ millions) for one real estate agency in the GTA. Fill in the 3-year Moving Averages, Weighted Moving Averages (with weights 5,3,2 starting from the most recent time period), and the Exponential Smoothing Forecast values in the table below: Round your answers in part (a) to 2 decimal places. Year Revenue 3-Year Moving Averages Weighted Moving Averages Exponential Smoothing α=0.35α=0.35 2016 4.7 2017 4.9 2018 5.4 2019 5.9
(a) Suppose the data in the table below represents total revenues (in $ millions) for one real estate agency in the GTA. Fill in the 3-year Moving Averages, Weighted Moving Averages (with weights 5,3,2 starting from the most recent time period), and the Exponential Smoothing
Round your answers in part (a) to 2 decimal places.
| Year | Revenue | 3-Year Moving Averages | Weighted Moving Averages | Exponential Smoothing α=0.35α=0.35 |
| 2016 | 4.7 | |||
| 2017 | 4.9 | |||
| 2018 | 5.4 | |||
| 2019 | 5.9 | |||
| 2020 | 6.7 | |||
| 2021 | 7.9 | |||
| 2022 Forecast |
Round your answers in part (b) to 2 decimal places, and round the MAD/MAE to 3 decimal places.
(b) Calculate the MAD/MAE for 3-year Moving Averages for 2019-2021 (use results from the previous problem).
| Year | Revenue | 3-Year Moving Averages | Absolute Error |
| 2016 | 4.7 | ||
| 2017 | 4.9 | ||
| 2018 | 5.4 | ||
| 2019 | 5.9 | ||
| 2020 | 6.7 | ||
| 2021 | 7.9 | ||
| MAD/MAE = |
Round your answers in part (c) to 2 decimal places, and round the MAD/MAE to 3 decimal places.
(c) Calculate the MAD/MAE for Weighted Moving Averages for 2019-2021 (use results from the previous problem with weights 5,3,2 starting from the most recent time period).
| Year | Revenue | Weighted Moving Averages | Absolute Error |
| 2016 | 4.7 | ||
| 2017 | 4.9 | ||
| 2018 | 5.4 | ||
| 2019 | 5.9 | ||
| 2020 | 6.7 | ||
| 2021 | 7.9 | ||
| MAD/MAE = |
(d) Based on the results (b)-(c), which method provides a better forecast of the revenue for 2019-2021?
- Weighted Moving Averages, since the MAD/MAE for Weighted Moving Averages is less than the MAD/MAE for 3-Year Moving Averages.
- 3-Year Moving Averages, since the MAD/MAE for 3-Year Moving Averages is less than the MAD/MAE for Weighted Moving Averages.
- Weighted Moving Averages, since the MAD/MAE for Weighted Moving Averages is greater than the MAD/MAE for 3-Year Moving Averages.
- 3-Year Moving Averages, since the MAD/MAE for 3-Year Moving Averages is greater than the MAD/MAE for Weighted Moving Averages.
- None of the above.
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