Lenovo uses the ZX-81 chip in some of it's laptops. The prices for the chip during the past 12 months were as follows:
Jan: 1.80
Feb: 1.67
Mar: 1.70
Apr: 1.85
May: 1.90
Jun: 1.87
July: 1.80
Aug: 1.83
Sep:1.70
Oct: 1.65
Nov: 1.70
Dec: 1.75
A. Use a 2 month moving average on all the data and plot the averages and the prices
B. Use a 3 month moving average and add the 3 month plot to the graph created in part a.
C. Which is better(using the mean absolute deviation): the 2 month or 3 month average?
D. Compute the forecasts for each month using exponential smoothing with the initial forecast for January of 1.80. Use .1, then .3, and finally .5. Using MAD, which is best?