Using the data in Problem 20, find the trend projection with regression model using the Time…

Using the data in Problem 20, find the trend projection with regression model using the Time Series Forecasting Solver of OM Explorer. Compare the performance of this method with the exponential smoothing method from Problem 21. Let the error analysis begin in period 2 (so that both exponential smoothing and trend projection are analyzed over the same time horizon).Which of these two methods would you choose if MAD is the key error measure?

Problem 20

The director of a large public library must schedule employees to reshelf books and periodicals checked out of the library. The number of items checked out will determine the labor requirements. The following data reflect the number of items checked out of the library for the past 3 years:

The director needs a time-series method for forecasting the number of items to be checked out during the next month. Find the best simple moving average forecast you can. Decide what is meant by “best” and justify your decision.

Problem 21

Using the data in Problem 20 and the Time Series Solver of OM Explorer, find the best exponential smoothing parameter alpha that minimizes MAD. Let the forecast for period 1 be the actual data for period 1, and begin the error analysis in period 2.