Problem Set Due 4 00 Pm 1 22 2019 Busi 403 Spring 2019 Problem 2 Zephyr Would Like Conside Q34344861

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MonthSales (in millions of boxes)113062130531311413135132461329713468134791378101394111441121469Problem Set A Due: 4:00 pm, 1/22/2019 BUSI 403 Spring 2019 Problem 2 Zephyr would like to consider a more sophisticated method and they suggest exponential smoothing Using exponential smoothing, compute three sets of forecasts of sales for Select-A-Size Paper Towel packs, with alpha (α) values of 0.4, 0.6 and 0.8. Assume that in all cases the forecast for month 1 is given as 1306 a. b. To visually illustrate the difference between actual sales and forecasts, plot the actual sales as well as the three exponential smoothing forecasts computed in a) for months 1 to 12 on one graph, which value of α produces the most responsive forecast? Explain. Calculate the MAD and Mean Absolute Percentage Error (MAPE) using the forecast errors for months 2-12 for each of these three sets of forecasts, which α value seems to be the most appropriate? Why? c. Problem 3 You have realized that the sales for Select-A-Size Paper Towel packs have been increasing over the past year. You have learned that the double exponential smoothing method can account for such a trend in the data Use double (trend-adjusted) exponential smoothing method to forecast sales for months 2 to 13, assuming S1 a. 1306 and T1 15 and set a 0.8 and B 0.2 b. Plot the actual sales, the double exponential smoothing forecast, and the forecast obtained using simple exponential smoothing in Problem 2 with a0.8 for months 2 to 12 on the same graph Compute the MAD and MAPE for months 2 to 12 for the double exponential smoothing forecast and compare them with those from simple exponential smoothing in Problem 2(c). Based on your calculations, which approach is better in this particular case, single or double exponential smoothing? Explair. c. d. Develop a simple linear regression model using month as the independent variable to forecast the sales of Select-A-Size Paper Towel packs for month 13. Plot your regression forecasts along with your double exponential smoothing forecasts for months 2 through 13 on the same graph Which one seems to capture the sales trend better? Briefly explain why Show transcribed image text