Overview and Rationale
Price Predictions Project
This assignment is designed to give you hands-on experience in performing both regression and time series forecasting. You will be given a particular real-life time series, and are asked to perform regression for predictions and to perform a time series forecasting. In addition, you are asked to perform a sensitivity analysis by using different parameter values and calculating measures of error for each of those values.
Course Outcomes
This assignment is directly linked to the following key learning outcomes from the course syllabus:
CO1: Use descriptive, Heuristic and prescriptive analysis to drive business strategies and actions
CO3: Analyze the role of analytics in supporting decision making for various other stakeholder groups within and outside of your organization
CO5: Utilize applied analytics and definitions of measures of success to provide a strategic analytic roadmap for an organization
Assignment Summary
The Excel workbook Honeywell.xlsx contains the historical stock prices of the Honeywell International Incorporated, an American multinational company that produces a variety of commercial and consumer products, engineering services and aerospace systems for a wide variety of customers, from private consumers to major corporations and governments from 10/15/2017 to 4/15/2018 (courtesy of Yahoo Finance). This project consists of three parts. Each part should be completed in a separate worksheet as designated in the workbook.
Project Instructions:
1. Perform moving average (MA) forecast on the Honeywell stock prices to forecast the price for 4/16/2018. Feel free to use any values you desire (e.g., MA for the past 3 days, 5 days or 10 days, 13 days or 26 days). Calculate MSE for each MA forecast and provide justification on why a specific MA works better than the other.
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2. Perform exponential smoothing forecasts on the Honeywell stock prices to forecast the price for 4/16/2018. Use successive values of 0.15, 0.35, 0.55, and 0.75 for the smoothing parameter α. Calculate the MSE of each forecast, Use the MSEs of your forecasts to determine the value of α that has provided the most accurate forecast. Describe qualitatively as to why such a value of α has yielded the most accurate forecast.
3. Use your exponential smoothing forecast with 𝜶=𝟎.75, and perform adjusted exponential smoothing forecasts on the Honeywell stock prices to forecast the price for 4/16/2018. Use successive values of 0.15, 0.25, 0.45, and 0.85 for the trend parameter β. Use the MSEs of your forecasts to determine the value of β that has provided the most accurate forecast. Describe qualitatively as to why such a value of β has yielded the most accurate forecast.
4. Perform a research to find out the actual Honeywell stock value on 4/16/2018, and compare this true value with your forecasts in this project. Among the forecasting methods that you have used in this project, what method has shown to be actually the most accurate method in predicting the Honeywell stock price for 4/16/2018?
Format & Guidelines
The report should follow the following format:
(i) Introduction (ii) Analysis
(iii) Conclusion
And be 600 – 800 words in length, not including the title page, and presented in the APA format.
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Above Standard
Meets Standards
Approaching Standards
Accurately modeled
Below Standards
Completely and
Correctly modeled the
Modeled the problem
R: Problem Modeling & Set-up ALY6050-CO1
concisely modeled the problem in Excel (or R) for each method
the problem in Excel (or R) for each method
problem in Excel (or R) for each method, but the model lacks detailed insight into the problem or the set-up is awkward.
in Excel (or R) for each method, but there are some gaps in the problem modeling and setup
Efficiently obtained correct and accurate solutions in Excel (or R) by using the appropriate analytic tools of the software
Obtained complete and accurate solutions in Excel (or R) by using the appropriate analytic tools of the software
Obtained a solutions in Excel (or R) by using the appropriate analytic tools of the software, but the solution is not complete.
R: Problem Solution & Accuracy ALY6050-CO1
Obtained correct solutions in Excel (or R) using the appropriate analytic tools of the software, but the application of the tool is awkward.
Provides a thorough
Provides an accurate
Provides an accurate
Provided a summary of
Word/Report: Problem Description & Introduction ALY6050-CO3
and concise summary of the problem descriptions and introduced the problem using rich and significant ideas
and succinct summary of the problem descriptions and problem introduction
summary of the problem descriptions and problem introduction, but the description is too wordy or not succinct
the problem
descriptions and
problem introduction,
but it is inaccurate or
incomplete
Word/Report: Description of Problem Analysis ALY6050-CO3 ALY6050-CO5
Provides a thorough and precise description of the analytic concepts and theories used in analyzing the problem
Accurately describes the analytic concepts and theories used in analyzing the problem
Describes the analytic concepts and theories used in analyzing the problem, but description lacks appropriate detail or precision
Describes the analytical concepts and theories used in analyzing the problem, but descriptions are incorrect or the analytical concepts and theories are incorrect
Word/Report: Description of Conclusions ALY6050-CO5
Provides conclusions and results obtained in the project using a high level of critical thinking and reasoning
Provides relevant conclusions and results obtained in the project that reflect critical thinking and reasoning
Provides conclusions and results obtained in the project, but not all conclusions or results are relevant to the problem or not all conclusions reflect good reasoning
Provides conclusions and results obtained in the project, but they are irrelevant and reflect a lack of critical thinking
Above Standard
Meets Standards
Approaching Standards
Below Standards
Word/Report: Writing Mechanics, Title Page, & References
Completely free of errors in grammar, spelling, and punctuation; and completely correct usage of title page, citations, and references. The report contains a minimum of 1000 words
There are no noticeable errors in grammar, spelling, and punctuation; and completely correct usage of title page, citations, and references. The report contains a minimum of 1000 words
There are very few errors in grammar, spelling, and punctuation; and completely correct usage of title page, citations, and references. The report contains a minimum of 1000 words
There are more than five errors in grammar, spelling, and punctuation; or the usage of title page, citations, and references are incomplete; or the report contains less than 1000 words
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