ECON1064 Quantitative Analysis - Final Assessment Questions

Question 5

The following monthly sales (in thousands of AUS dollars) of chocolate boxes have been recorded for January, February, March, and April, respectively: 8, 8, 5, 9. Focusing on sales forecast accuracy for the month of April only, explain which of the following forecasting method would you recommend: the Naïve method, the Average method, or the Simple exponential smoothing method (assuming alpha=0.8 and initial state of 7)? (3 marks).