This document provides instructions for forecasting time series data using simple moving averages, exponential smoothing, and linear trend methods. It asks the reader to: 1) Develop forecasts using 5 and 7 period simple moving averages and exponential smoothing with alphas of 0.4, 0.58, and 0.8. 2) Develop linear trend forecasts and compute error metrics like MSE, MFE, and MAE for the last 10 periods. 3) Plot the results on a separate chart, scaling the axes appropriately for comparison.

1. [Step 1]
Using the data in the attached template, as a starting point:
1. Develop a 5 period simple moving average and 7 period simple moving average forecast
through Period 18.
2. Develop a series of exponential forecasts through Period 18 with alpha of 0.40, 0.58, and
0.80.
3. Develop a linear trend forecast through Period 18 and then only Priod 21.
4. Compute the MSE for each forecast based on the last 10 forecasts and determine the best
forecasting method.
5. Also compute the MFE (Mean Forecast Error) and the MAE (Mean Absolute Error, a.k.a.
Mean Absolute Deviation, MAD)
based on last 10 periods for the linear trend method.
6. Plot the results on a common graph on the second worksheet "Chart of Forecasts".*
(Include plot of the original data as a reference.)
a. Adjust the independent axis scale and starting point as necessary for clarity and observe
"best practices" covered earlier.
>>Must be done or the chart will appear "cluttered" and difficult to read, w/o much
separation between series.
b. *You may plot each one independently relative to the original data, but scale all the
dependent axis to the same values for comparitive purposes.
>>Must be done to avoid potentially misleading the audience if the axis scales differ. For
the savvy, it makes it easier to compare charts.
c. Insert the #N/A symbol in leading blank cells (skipped cells) to instruct Excel to ignore
those on the plot.
>> This avoids plotting zeros for empty cells and the leading line up to the first point.
PART A
Use the link below to validate your model.
You can revise your model and re-validate until you are satisfied with the point count.
PART B
Once you are satisfied with your model, use PART B link to submit your worksheet / workbook
for the remaining credits.
Note: The spreadsheet programming must be visible in formula view to receive credit. (Last 10
Period) MSE Simple Moving Exponential Trend yt+1=ki=tk+1nyiyt+1=y^t+ety^t=b0+b1t