Answer the following questions and provide explanations. 

 

QMB 3600 – HW #11
You must use MS Excel to solve the problem below. Working out the solution by hand will not be
acceptable. Please use the file “Using Excel for Forecasting.docx” which was posted on Blackboard to
determine how to proceed.
A trucking company has the following profit data for the past 12 months: The management recognizes that there are monthly irregularities in the above data and would like to
use a smoothing method to iron out the irregularities to forecast the 13th month’s expected profit. Part 1:
If Exponential Smoothing was used, which of the following values of the smoothing constant ά
results in a forecast with the highest accuracy?
0.4
0.5
0.6
What is the forecasted 13th month’s profit in each case? Use Microsoft Excel to determine your answer.
Provide the MS Excel printout with your homework submission clearly identifying your answer. Part 2:
If you use the Trend Projection method - is there a long term linear trend that you can determine from
the solution? Clearly describe the reason for your answer.
What are the profit forecasts for months 13 & 14?
Use Microsoft Excel to determine your answer. Provide the MS Excel printout with your homework
submission clearly identifying your answer.

Attachments:

• 1492740500-HW-11 2.doc