Assignment 1: Forecasting
Introduction
This assignment will assess your knowled
Assignment 1: Forecasting
Introduction
This assignment will assess your knowledge of the concepts and techniques you have learned this week. Please answer the questions and submit your answers in a Word document.
Instructions
Submit your answers to both questions in a Word document. Download the data sets and use Excel to solve the problems.
Question 1. CoastCo Insurance is interested in developing a forecast of larceny thefts in the United States. Download the spreadsheet Download Download the spreadsheetfor the available data.
Plot this series in a time series plot and make a naive forecast for years 2 through 19. Plot actual and forecast values of the series for the years 1 through 19. (You will not have an actual value for year 19 or a forecast value for year 1.)
Calculate the RMSE and MAD for years 2 through 18. On the basis of these measures and what you see in the plot, what do you think of your forecast? Explain. Watch the given video if you do not know how to plot data in Excel:
Igines. (2012, December 9). How to make a line graph in excel (scientific data)Links to an external site. [Video file] [6 min 41 sec]. Retrieved from Question 2. As the world’s economies become increasingly interdependent, various exchange rates between currencies have become important in making business decisions. For many U.S. businesses, the European Union exchange rate (in euro per U.S. dollar) is an important decision variable. Download the spreadsheet Download Download the spreadsheetwith the data on this exchange rate (EXEUR) by month for a two-year period.
Prepare a time series plot of this data series.
Use the naive forecasting model to forecast EXEUR for each month from year 1 M2 through year 3 M1.
Plot actual and forecast values of the series for the year 1 M1 through year 3 M1. (You will not have an actual value for year 3 M1 or a forecast value for year 1 M1)
Calculate RMSE for the period from year 1 M2 through year 2 M12. Other helpful Videos:Plotting a series in a time series plot: A time series plot is a graph where time is the unit on the x-axis. The x-axis is labeled as the time-axis, and the y-axis represents the variable being measured. The x-values correspond to the time period, which can range from year 1 to year 18 for the first question and from year 2016 M1 to 2017 M12 for question 2. The y-values represent Larceny Theft for question 1 and EXEUR for question 2.
Plotting data in a time series plotLinks to an external site. (1:36)
Plot actual and forecast values: In this plot, you are asked to graph two series together: the actual data and the forecast that you calculated. You can find an example of how to plot two series in a time series plot. The x-axis represents time, and the y-axis represents both actual and forecasted values. Here is a short video on how to plot actual and forecasted values in a time series plot:
Plot Multiple Lines in ExcelLinks to an external site. (1:56)
Submission
Submit your answers in a Word document.
Submit the Excel files to show your calculations.
Include the relevant graphs of actual and forecast values of the series. Please do not forget to title your graph.
Submit your calculations and answers in a 1–2-page document and spreadsheet to the Dropbox.
Evaluation Criteria
All forecasting assignments together make up 24% of the total course score. This assignment is worth 40 points. Here is the rubric Download rubricfor the assignment.
View Rubric
Forecasting Assignment Rubric
Forecasting Assignment Rubric
CriteriaRatingsPts
Evidence the problem was understoodview longer description
6 pts
Exemplary Performance
Shows very good understanding of the problem and its solution technique4 pts
At or Above Average
Shows sound understanding of the problem2 pts
At or Below Average
Shows limited understanding of the problem0 pts
Low Performance
Shows very limited or no understanding of the problem/ 6 pts
Technique
view longer description
10 pts
Exemplary Performance
Very effective use of technique; uses forecasting techniques efficiently while justifying the solution7.5 pts
At or Above Average
Effective use of technique; uses appropriate technique, but some parts of the technique or summary statistics left unexplained5 pts
At or Below Average
Limited use of appropriate techniques; is not precise in using forecasting technique2.5 pts
Low Performance
Very limited use of technique; uses unsuitable techniques or simple manipulation of the data in attempting to find a solution/ 10 pts
Answer
view longer description
10 pts
Exemplary Performance
All correct answers, all requested explanations perfectly presented7.5 pts
At or Above Average
Most answers correct, but incomplete explanations or incorrect reasoning5 pts
At or Below Average
Most answers incorrect, appropriate techniques2.5 pts
Low Performance
Incorrect answers, inappropriate techniques/ 10 pts
Completion
view longer description
8 pts
Exemplary Performance
All parts of the assignment completed6 pts
At or Above Average
Most parts of the assignment completed4 pts
At or Below Average
Some parts of the assignment completed2 pts
Low Performance
Few to no parts of assignment completed/ 8 pts
Organization and Neatness
view longer description
6 pts
Exemplary Performance
Clear organization with few or no grammar or spelling errors4 pts
At or Above Average
Clear organization with some grammar or spelling errors2 pts
At or Below Average
Clear organization with significant grammar and spelling errors0 pts
Low Performance
Unclear organization with significant grammar and spelling errors/ 6 pts
Total Points: 0