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# Assignment No1 Open Date 28-11-14 Due Date 04-12-14

MANAGERIAL ECONOMICS (ECO404)
ASSIGNMENT No.01
The Case:
Allah has bestowed Pakistan with large reserves of minerals and gemstones. Gemstones
are mostly available in Swat, Dir, Mansehra, Kohistan, and Peshawar District.Gemstones
Corporation of Pakistan was established in 1979 to develop the gemstones sector in
Pakistan but this corporation was liquidated in 1997. Nowadays a number of groups are
functioning in this sector. All Pakistan Commercial Exporters Association of Rough &
Unpolished Precious and Semi-Precious Stones (APCEA) is one of them. APCEA buys
gemstones from local collectors and then send to wholesalers all over the country. APCEA
has the data on the number of gemstones (in thousands) ordered during the past twelve
months and wanted to develop forecasting model.You are required to help APCEA in
developing forecasting model. Data is given as follows.
Month
Firm’s Actual
Market Share
(A)
Jan-13 25.6
Feb-13 24.7
Mar-13 21.3
Apr-13 13.9
May-13 12.6
Jun-13 18
Jul-13 21.5
Aug-13 22.3
Sep-13 30.7
Oct-13 15
Nov-13 13.8
Dec-13 22.6
Requirement:
A- Use a three period moving average method to forecast the demand in January of 2014.
Also calculate the RMSE (Root-mean-square error) for this method. Use the table above.
B- Use a five period moving average method to forecast the demand in January of 2014. Also
calculate the RMSE for this method. Use the table above to carry out your calculations.
C-Compare both the methods and tell which one is good for forecasting?
(Marking scheme: 10+10+5)

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### Replies to This Discussion

its quite easy

let's Start

kr k dy do phr Nomi dear

Nomi runs away

hi guys rmse kase nikalna ha plz explain kr ain

Our main purpose here discussion not just Solution

We are here with you hands in hands to facilitate your learning and do not appreciate the idea of copying or replicating solutions.

So Easy I have Done It

Root-mean-square error (RMSE)   =     7.54

Five Quarters Moving Average       =     6.62

dear umair kindly upload complete calculations

I AM GOING TO START NOW. WHY U FELLOWS GETTING WORRIED. ITS TOO EASY.

Part (A): demand forecast by using three period moving averages method:

 Months Firm’s actual market share          (A) Three quarter moving averages          (F) (A-F) (A-F)^2 Jan.13 25.6 Feb.13 24.7 Mar.13 21.3 Apr.13 13.9 23.87 -9.97 99.4009 May.13 12.6 19.97 -7.37 54.3169 Jun.13 18 15.93 2.07 4.2849 Jul.13 21.5 14.83 6.67 44.4889 Aug.13 22.3 17.37 4.93 24.3049 Sep.13 30.7 20.6 10.1 102.01 Oct.13 15 24.83 -9.83 96.6289 Nov.13 13.8 22.67 -8.87 78.6769 Dec.13 22.6 19.83 2.77 7.6729 Jan.14 17.13 Total=            511.7852

HERE YOU GO FIRST PART OF THE ASSIGNMENT

IF YOU FELLOWS FOUND ANY ERROR IN CALCULAION DO METION SO THAT I CAN RECTIFT MY OWN ASSIGNMENT

HERE IS THE SECOND PART OF THE QUESTION . IF ANYONE OF U FIND ANY ERROR DO MENTION BEACUSE ITS MY FINAL ASSIGNMENT. AND I HAVE UPLOADED IT.

SO I CAN COORECT THE ERROR IF THERE IS ANY!

Part (B): demand forecast by using five period moving average methods:

 Months Firm’s actual market share              (A) Five quarter moving averages         (F) A-F (A-F)^2 Jan.13 25.6 Feb.13 24.7 Mar.13 21.3 Apr.13 13.9 May.13 12.6 Jun.13 18 19.62 -1.62 2.6244 Jul.13 21.5 18.1 3.4 11.56 Aug.13 22.3 17.46 4.84 23.4256 Sep.13 30.7 17.66 13.04 170.0416 Oct.13 15 21.02 -6.02 36.2404 Nov.13 13.8 21.5 -7.7 59.29 Dec.13 22.6 20.66 1.94 3.7636 Jan.14 20.88 TOTAL =     306.9456

Calculation of RMSE:

RMSE = 6.6219

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