CHAPTER 2

Elementary Time Series Techniques

Having finished reading Chapter 1, Mo decides that he has collected enough historical data to employ a quantitative forecasting method. However, he worries that he does not know any quantitative techniques. Dr. Theo assures him that this chapter will introduce the two easiest ones: simple moving averages (MA) and exponential smoothing (ES). Both of them are used to obtain one-period forecasts. As Mo has to forecast how many Honda motorcycles to order next quarter, these techniques are good starting steps for his task. Dr. Theo says that once we finish with this chapter, we will be able to:

1.Describe the four components of a time series.

2.Distinguish the MAs from the weighted moving averages (WMs). ...

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