Consider the data on new orders for computers and electronic

Consider the data on new orders for computers and electronic products and the M1 money supply for the years 2011 through 2014.

Year

Month

New Orders for Computers and Electronic Products

M-1 Money Supply

2011

1

19222

1855.6

2011

2

20727

1874.7

2011

3

24893

1892.0

2011

4

19375

1897.8

2011

5

20152

1934.3

2011

6

25075

1947.0

2011

7

18615

2001.5

2011

8

21289

2112.9

2011

9

27014

2126.0

2011

10

22179

2137.4

2011

11

20761

2172.0

2011

12

27818

2168.2

2012

1

19447

2202.3

2012

2

23043

2212.2

2012

3

26734

2228.7

2012

4

21897

2245.3

2012

5

22403

2251.0

2012

6

24942

2262.3

2012

7

19365

2314.6

2012

8

20240

2346.5

2012

9

25478

2383.6

2012

10

20790

2415.5

2012

11

20362

2423.2

2012

12

27841

2457.7

2013

1

17393

2467.6

2013

2

18725

2470.4

2013

3

22919

2474.8

2013

4

19560

2511.0

2013

5

20333

2522.0

2013

6

24619

2517.9

2013

7

18065

2545.6

2013

8

18487

2557.3

2013

9

24877

2578.8

2013

10

20410

2620.2

2013

11

20194

2622.2

2013

12

24955

2654.5

Using the same data, develop a weighted moving average forecast where the weight of the most recent data (t_-1) is 0.50, 0.25 for period (t_-2), 0.15 for period (t_-3), and 0.10 for period (t_-4).

Year	Month	New Orders for Computers and Electronic Products	M-1 Money Supply
2011	1	19222	1855.6
2011	2	20727	1874.7
2011	3	24893	1892.0
2011	4	19375	1897.8
2011	5	20152	1934.3
2011	6	25075	1947.0
2011	7	18615	2001.5
2011	8	21289	2112.9
2011	9	27014	2126.0
2011	10	22179	2137.4
2011	11	20761	2172.0
2011	12	27818	2168.2
2012	1	19447	2202.3
2012	2	23043	2212.2
2012	3	26734	2228.7
2012	4	21897	2245.3
2012	5	22403	2251.0
2012	6	24942	2262.3
2012	7	19365	2314.6
2012	8	20240	2346.5
2012	9	25478	2383.6
2012	10	20790	2415.5
2012	11	20362	2423.2
2012	12	27841	2457.7
2013	1	17393	2467.6
2013	2	18725	2470.4
2013	3	22919	2474.8
2013	4	19560	2511.0
2013	5	20333	2522.0
2013	6	24619	2517.9
2013	7	18065	2545.6
2013	8	18487	2557.3
2013	9	24877	2578.8
2013	10	20410	2620.2
2013	11	20194	2622.2
2013	12	24955	2654.5

Solution

Year Month New Orders for Computers and Electronic Products M-1 Money Supply weighted moving average forecast for Computer and electronics = .5*(t-1) + .25*(t-2) + .15*(t-3) + .1*(t-4) weighted moving average forecast for M-1 Money Supply = .5*(t-1) + .25*(t-2) + .15*(t-3) + .1*(t-4) 2011 1 19222 1855.6 2011 2 20727 1874.7 2011 3 24893 1892 2011 4 19375 1897.8 2011 5 20152 1934.3 20942 1888.665 2011 6 25075 1947 20726.4 1912.87 2011 7 18615 2001.5 22971.05 1930.945 2011 8 21289 2112.9 20536.55 1967.425 2011 9 27014 2126 21074.7 2042.305 2011 10 22179 2137.4 24129 2086.15 2011 11 20761 2172 22897.85 2117.285 2011 12 27818 2168.2 22106.25 2150.54 2012 1 19447 2202.3 25127.5 2160.31 2012 2 23043 2212.2 22010.05 2182.74 2012 3 26734 2228.7 22632.05 2199.105 2012 4 21897 2245.3 24826.6 2214.565 2012 5 22403 2251 23033.15 2231.885 2012 6 24942 2262.3 22990.15 2242.35 2012 7 19365 2314.6 24029.7 2253.565 2012 8 20240 2346.5 21468.15 2285.055 2012 9 25478 2383.6 20942.85 2316.345 2012 10 20790 2415.5 23197.95 2351.845 2012 11 20362 2423.2 21737 2387.085 2012 12 27841 2457.7 21224.2 2407.665 2013 1 17393 2467.6 24677.3 2435.335 2013 2 18725 2470.4 20790.05 2453.255 2013 3 22919 2474.8 19923.1 2463.075 2013 4 19560 2511 21533.8 2470.91 2013 5 20333 2522 20057.8 2491.52 2013 6 24619 2517.9 20366.85 2507.01 2013 7 18065 2545.6 22618.65 2513.58 2013 8 18487 2557.3 20193.2 2531.675 2013 9 24877 2578.8 19485.9 2544.935 2013 10 20410 2620.2 22231.9 2562.355 2013 11 20194 2622.2 21003.8 2592.955 2013 12 24955 2654 20779.75 2608.7 weighted moving average forecast for Month 5, 2011 = .5 * value of month 4 + .35 *value of month 3 + .15* value of month 2 + .1* value of month 1 Note: above formula is as per the statement in question and it is applied on following months subsequently.