In my assignment I will forecast the third and the fourth quarter revenues of Consolidated Edison Company for the year 1996. The company’s main fields are electricity, gas and steam supplying. In the case of every company it is important to forecast the future revenues to be able to calculate the company’s expected profits. That is the situation in this case as well, so I must do my job as perfect as I can.I got the past eleven years data, from which I can analyse the whole situation and which I can use to predict for the future. To make the forecast more accurate I can use the actual quarterly revenues.Quarterly revenues for Consolidated Edison Company($ million), 1985-1995YearMarch 31.June 30.September 30.December 31.1985144112091526132119861414118714111185198712841125149311921988132711021469121319891387121815751371199014941263161313691991147913301720134419921456128017171480199315861396180014831994169713921822146119951669146018801528199618671540Source:The Value Line Investment Survey (New York: Value Line, 1990, 1993, 1996) p.170.There are several different methods, which can be used by forecasters. For this case I will test the nave, the moving averages, the exponential smoothing, the double moving averages, the deseasonalisation, the linear regression and the exponential regression models.After having conducted the procedures, the forecaster’s task is to evaluate the models. This is not an easy task because there are a lot of measures, based on which the person has to decide.The measure coefficients test the difference between the observed and the forecasted values, which then used for comparison.These measures are as follows:MSE:This is the mean squared error, which sum and square all of the errors and take their average.MAD:This is the mean absolute deviation, which sum the absolute errors and take their averages.MAPE:This is the mean average percentage error, which shows the difference in percentages.As I ment...
