Jane White has recorded the following sales figures for last year for herbusiness: January, $35,645; February, $35,456; March, $31,270; April,$32,129; May, $34,456; June, $35,256; July, $36,218; August, $35,456;September, $34,250; October, $32,156; November, $30,125; December,$32,275. She wants to select from one of three models: a 3-month movingaverage, a weighted moving average (she believes that the weightsshould be 0.2, 0.3, and 0.5), and an exponential smoothing average inwhich she uses an α of 0.2 and an assumed forecast for January of Year 1of $35,000.a. Construct a table that shows each of these forecasts for the current year andprovide the forecast for January of Year 2.b. Using the available data and your forecasts, which model do you suggest thatJane use for her business?
Inverse Normal Distribution
The method used for finding the corresponding z-critical value in a normal distribution using the known probability is said to be an inverse normal distribution. The inverse normal distribution is a continuous probability distribution with a family of two parameters.
Mean, Median, Mode
It is a descriptive summary of a data set. It can be defined by using some of the measures. The central tendencies do not provide information regarding individual data from the dataset. However, they give a summary of the data set. The central tendency or measure of central tendency is a central or typical value for a probability distribution.
Z-Scores
A z-score is a unit of measurement used in statistics to describe the position of a raw score in terms of its distance from the mean, measured with reference to standard deviation from the mean. Z-scores are useful in statistics because they allow comparison between two scores that belong to different normal distributions.
Jane White has recorded the following sales figures for last year for her
business: January, $35,645; February, $35,456; March, $31,270; April,
$32,129; May, $34,456; June, $35,256; July, $36,218; August, $35,456;
September, $34,250; October, $32,156; November, $30,125; December,
$32,275. She wants to select from one of three models: a 3-month moving
average, a weighted moving average (she believes that the weights
should be 0.2, 0.3, and 0.5), and an exponential smoothing average in
which she uses an α of 0.2 and an assumed forecast for January of Year 1
of $35,000.
a. Construct a table that shows each of these forecasts for the current year and
provide the forecast for January of Year 2.
b. Using the available data and your forecasts, which model do you suggest that
Jane use for her business?
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