ITSCM 306
Chapter 18 Problem Set: Forecasting
Instructions

Include at least three digits in all answers.

Submit your excel file. Also, submit a word/pdf file with your answers.
Download the excel file called oildata. These data show yearly Oil production in Saudi Arabia
from 1965 to 2013.
1. Obtain a forecast for 2014 based on a simple three-year moving average. (10%)
539.375
2. Obtain a forecast for 2014 based on weighted moving average. Use a weight factor
of 60% for the most recent year, 30% two years ago, and 10% three years ago.
(10%)
542.950
3. This time, calculate a forecast for 2014 based on exponential smoothing with α=0.2.
(20%)
508.307
4. What is the MAPE for the exponential smoothing? (20%)
21.530
5. What is the α when you use solver to minimize MAPE? (20%)
1
6. Now, develop a regression model based on historical production data. (20%)
i.
What is your slope? (5%) =6.47306559183673
ii.
What is your intercept? (5%) =12494.9429111429
iii.
Is time a significant predictor? Why or why not? (5%) =Time is a significant
predictor since it is 1.75930018746764E-09 which is less than .05
ITSCM 306
Chapter 18 Problem Set: Forecasting
iv.
What is your forecast for 2014 based on this regression model? Explain how
you obtained it. (5%)=541.811
To get the forecast using the regression output I multiplied cell B73 by
A51 and added it to B72 or 6.47306559183673*2014+-12494.9429111429