Kazandra Gabriel

February 8, 2016
OPRE 3310

UBS Forecasting Executive Summary

For this forecasting homework assignment, the data points that were used were
in a given date of October 3, 2015 November 3, 2015. There were several techniques
used: Linear, nave, weighted average, moving average, and exponential smoothing.
For recap, linear is used based on the nature of the trend from the data points already
provided. Nave forecast is the previous periods actual value for any period. Moving
average is when the average of a number of recent actual values. In this assignment,
based on the excel spreadsheet using the nave forecasting technique along with the
exponential technique provide the most accurate with mean absolute percent error of
1.40% for nave technique and 1.36% for exponential technique, while the other
techniques results were 2.90% for linear, 2.00% for moving average and 1.55% for
weighted average. Nave technique works for this company because prices are quite
stable and exponential smoothing works best because not only that the data points are
stable but in calculations, it provides a percentage of forecast error.
One day forecast beyond the last data point using exponential smoothing is 19.0249,
but according to the actual price it is 19.2700. Based on my percent error of 1.2719%, I
believe my forecast beyond the last data point is good enough compared to the actual
stock price on a given date of November 4, 2015.