Authors
Dr. M Ajoy Kumar
Siddaganga Institute of Technology
Muralidhara A
JMP
Objective
Learn various exponential smoothing techniques to build various forecasting models and compare them.
Background
Copper is a base metal with a vast number of industrial applications. The copper prices in India were found to be highly volatile during 2017-18. The price was around ₹375 per kilogram at the beginning of 2017. During the two-year period, at one time the price touched a maximum of ₹490, plummeted to ₹350, and closed at ₹415 by end of 2018. Arun, a researcher at the Commodity Research Centre of a leading investment advisory firm in Mumbai, was trying to understand the behavior of copper prices. He wanted to forecast the price using an appropriate technique.
The Task
Arun performed the following tasks:
- -Collected daily copper prices for two years
- -Analyzed the pattern of price movements
- -Applied various smoothing techniques
- -Selected the most suitable model based on information criteria