A hotdog stand owner recorded quarterly hotdog sales over 12 quarters. The owner wants to forecast the next quarter's sales using either a 3-period or 2-period moving average, exponential smoothing with an alpha of 0.3, or linear regression. A 3-period moving average is better because it considers more data points and helps reduce fluctuations compared to a 2-period average.
1. a hotdog stand owner who sales hotdogs only on saturdays has coll
1. 1. A hotdog stand owner who sales hotdogs only on Saturdays
has collected the following time series data on the number of
hotdogs sold over the past 12 quarters.
Year Quarter Demand
1 Winter 29
1 Spring 65
1 Summer 56
1 Fall 45
2 Winter 23
2 Spring 57
2 Summer 48
2 Fall 32
3 Winter 14
3 Spring 55
3 Summer 52
3 Fall 25
A) Forecast next weekly rate using a
3 period moving
average.
2. B) Forecast the next weekly rate using a
2 period moving
average
.
Which one of these (A or B) is a better forecast and why?
Please explain it in writing.
C) Forecast the next weekly rate by using exponential
smoothing with an alpha value of 0.3.
D) Forecast the next weekly rate by using a linear regression.