Question

You are interested in predicting the value of expenditures on food by a household for the year 2023. You have documented following information showing the value of food expenditures (Ghana Cedis) made by a particular household for the previous seven years: Year 2016 2017 2018 2019 2020 2021 2022 Medical Claims GHS405,642 GHS407,180 GHS408,203 GHS410,083 GHS411,085 GHS412,200 GHS414,044 i) Provide a 2-year moving average forecast of medical claims for the period up to 2023. ii) Use an value of 0.25 to produce a forecast for household food expenditure for the period up to 2023. Set . iii) Compute the MAD value for the moving average forecast in question (i) and the exponential smoothing forecast in question (ii) for the years. iv) Provide a forecast for medical claim for year 2024 using the best model according to the MAD analysis in question (iii).

          You are interested in predicting the value of expenditures on food by a household for the year 2023. You have documented following information showing the value of food expenditures (Ghana Cedis) made by a particular household for the previous seven years:
 
 
Year
2016
2017
2018
2019
2020
2021
2022
Medical Claims
GHS405,642
GHS407,180
GHS408,203
GHS410,083
GHS411,085
GHS412,200
GHS414,044
 
 
i) Provide a 2-year moving average forecast of medical claims for the period up to 2023.            
 
ii) Use an value of 0.25 to produce a forecast for household food expenditure for the period up to 2023. Set .
 
iii) Compute the MAD value for the moving average forecast in question (i) and the exponential smoothing forecast in question (ii) for the years.
 
iv) Provide a forecast for medical claim for year 2024 using the best model according to the MAD analysis in question (iii).

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Added by Ciddy S.

Elementary Statistics a Step by Step Approach

Allan G. Bluman 9th Edition

Instant Answer

Solved by Expert Rabia Sarwar

08/16/2023

Step 1

For 2023, we would average the values from 2021 and 2022. (412,200 + 414,044) / 2 = 413,122. So, the 2-year moving average forecast for 2023 is GHS413,122. ii) Exponential smoothing is a time series forecasting method for univariate data that involves Show more…

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You are interested in predicting the value of expenditures on food by a household for the year 2023. You have documented following information showing the value of food expenditures (Ghana Cedis) made by a particular household for the previous seven years: Year 2016 2017 2018 2019 2020 2021 2022 Medical Claims GHS405,642 GHS407,180 GHS408,203 GHS410,083 GHS411,085 GHS412,200 GHS414,044 i) Provide a 2-year moving average forecast of medical claims for the period up to 2023. ii) Use an value of 0.25 to produce a forecast for household food expenditure for the period up to 2023. Set . iii) Compute the MAD value for the moving average forecast in question (i) and the exponential smoothing forecast in question (ii) for the years. iv) Provide a forecast for medical claim for year 2024 using the best model according to the MAD analysis in question (iii).

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