Question

Using the data set provided, Make (and state) any necessary assumptions and apply the following forecast methods to the earliest two years of actual data:

Three-period weighted moving average with weights of .50, .30, and .20 and the heaviest weights applied to the more recent data points;

(c) Evaluate the applied forecast methods using : Cumulative forecast error (CFE) Shipments Fasteners

Shipments	Fasteners
Jan-17	335798
Feb-17	297853
Mar-17	318399
Apr-17	311730
May-17	363876
Jun-17	296832
Jul-17	297513
Aug-17	321144
Sep-17	317677
Oct-17	325487
Nov-17	272937
Dec-17	276282
Jan-18	335439
Feb-18	310514
Mar-18	407754
Apr-18	356169
May-18	345322
Jun-18	331997
Jul-18	343059
Aug-18	350277
Sep-18	265205
Oct-18	389332
Nov-18	310474
Dec-18	308429
Jan-19	385807
Feb-19	332529
Mar-19	407606
Apr-19	361946
May-19	453432
Jun-19	412892
Jul-19	447359
Aug-19	363769
Sep-19	361232
Oct-19	451421
Nov-19	363724
Dec-19	331619

Answer 1

Hi,

Please find answers as below, If you like the answer please up vote.

I have used excel to solve the problem. I have added snpashots of formulas used to calculate the same.

Answer

Here, Cumulative forecast error is positive = 69,280 , which states that the actual demand is more than the forecasted demand.

But here, if we consider the percentage of cumulative forecast error which is cumulative percentage error divided by total actual demand (=69,280 / 1,1510,785 = 0.00602, which is 0.6%), is 0.6 % which is considers as a good estimator.

Hence, we can say that this forcasting method is accurate.

Formulas Used