1a)under what conditions will moving averages and trend forecasts
generate the same result?
b)Suppose we are comparing a trend model, with no seasonality, against
a causal model. Assume we are looking at sales of a restauraunt.
From the trend analysis we find that sales go up by 3%. We have a
causal model that, in the past, has done quite well in predicting
results. The causal model shows that sales are a function of growth
income in the region, the local unemployment rate, and the percent of
people in the region who do not have children. Under what conditions
will the trend model and the causal model yield the same forecast. Be
specific.
c)True or False, Explain. If a moving average forecast and a causal
model forecast gives the same prediction then the moving average
forecast and the trend forecast give the same prediction.
2a) True or False, Explain. If there is a trend in the data then a
moving average forecast will consistently have a forecast that is
below the actual value.
b) Best Buy has deseasonalized the data and has a trend growth of
sales growing by 5% per year. Assume that is is forecasting yearly
sales (so it doesn't have to worry about the seasonality factor).
Give me at least 3 conditions under which a causal model forecast will
be better (less error) than a trend forecast.
c)Give me an example where trend and moving average give the same
forecast but the causal forecast gives a different forecast.
3) Explain, using examples, what is meant by the following
proposition: A moving average forecast can never be superior to a
trend forecast which can never be superior to a causal model forecast. |