Here are the actual tabulated demands for an item for a nine-month period (January through September). Your supervisor wants to test two forecasting methods to see which method was better over this period.

January 112
February 135
March 154
April 170
May 162
June 174
July 134
August 136
September 135

a. Forecast April through September using a three-month moving average. (Round your answers to 2 decimal places.)

Month Three-Month Moving Average
April 133.67selected answer correct
May 153.00selected answer correct
June 162.00selected answer correct
July 168.87selected incorrect
August 156.67selected answer correct
September 148.00

b. Use simple exponential smoothing with an alpha of 0.40 to estimate April through September, using the average of January through March as the initial forecast for April. (Round your answers to 2 decimal places.)

April 148.20selected answer incorrect
May 158.72selected answer incorrect
June 161.83selected answer incorrect
July 150.69selected answer incorrect
August 144.81selected answer incorrect

c-1. Calculate MAD for each method. (Round your answers to 2 decimal places.)

Three-month moving average 20.94selected answer correct
Exponential smoothing 17..28 incorrect

c-2. Use MAD to decide which method produced the better forecast over the six-month period.

multiple choice

  • Exponential smoothing. Correct

  • Three-month moving average.

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