Question

The following data show the average prices for a​ 32-inch LCD television over a​ six-year period based on​ fourth-quarter results. Complete parts a through e below.

Year	2005	2006	2007	2008	2009	2010
Price	​$1577	​$1871	​$729	​$561	​$521	​$370

​a)	Forecast the average price of a​ 32-inch LCD television during the fourth quarter of 2011 using a​ two-period simple moving average.

The forecasted average price of a​ 32-inch LCD television during the fourth quarter of 2011 using a​ two-period simple moving average is

​$____ ​(Round to the nearest dollar as​ needed.)

b. Calculate the MAD for the forecast in part a.

____

c. Forecast the average price of a​ 32-inch LCD television during the fourth quarter of 2011 using a​ three-period simple moving average.

____

d.Calculate the MAD for the forecast in part c.

____

e) Which forecast would you​ choose?

Answer 1

a)

Year	Price	forecast	error
2005	1577
2006	1871
2007	729	1724.00	995
2008	561	1300.00	739
2009	521	645.00	124
2010	370	541.00	171
		average	507.25

Forecast =(521+370)/2 =445.5

b)MAD=507.25

c)

Year	Price	forecast	error
2005	1577
2006	1871
2007	729
2008	561	1392.33	831.33
2009	521	1053.67	532.67
2010	370	603.67	233.67
		average	532.56

Forecast =(521+370+561)/3 = 484.00

d)

MAD =532.56

e)

​ two-period simple moving average