The following inventory pattern has been observed in the Zahm Corporation over 12 months. Month Inventory...

The following inventory pattern has been observed in the Zahm Corporation over 12 months.

Month	Inventory
Apr-16	1,544
May-16	1,913
Jun-16	2,028
Jul-16	1,178
Aug-16	1,554
Sep-16	1,910
Oct-16	1,208
Nov-16	2,467
Dec-16	2,101
Jan-17	1,662
Feb-17	2,432
Mar-17	2,443

Use both three-month and five-month moving-average models to forecast the inventory for the next January. Use mean absolute percentage error (MAPE) to evaluate these two forecasts.

Expert Solution

3 months moving averages forecast

MAPE = 22.69 %

5 months moving averages forecast

MAPE = 23.79 %

MAPE of 3 months moving averages is less than MAPE of 5 months moving averages

This forecast using 3 months MA is better

jeff jeffy answered 2 years ago

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