Smoothing Assignment
Motorola Corporation
Sales of Motorola, Inc. from 1986 quarter 1 through 1995 quarter
four are shown below.
YEAR Q1 Q2 Q3 Q4
1986 1139 1499 1431 1619
1987 1547 1639 1672 1850
1988 1955 2095 2007 2193
1989 2175 2385 2408 2652
1990 2533 2715 2703 2934
1991 2743 2814 2745 3039
1992 3055 3141 3396 3711
1993 3626 3936 4408 4993
1994 4693 5439 5660 6453
1995 6011 6877 6851 7298
Table of sales of Motorola, Inc. from 1986Q1 - 1995Q4
Source: Motorola, Inc. Annual Reports (in Millions of Dollars)
1. Which type of exponential smoothing model is best suited to
this sales series?
2. Apply the model you selected above to make a sales forecast
for the four quarters of 1996.
3. Calculate the RMSE for this model in the historic
period (up through 1995Q4).
4. Actual sales for 1996 Q1 - Q4 were: 6,955; 6,835; 6,498; and
7,685. Use this information to calculate the RMSE for the forecast
horizon. How do the historic and forecast period RMSEs
compare?