Question

Consider the following data:

Monthly Profit of an Auto Repair Shop

Month	Jan-14	Feb-14	Mar-14	Apr-14	May-14	Jun-14	Jul-14	Aug-14	Sep-14
Profit ($)	17,123	17,273	16,055	18,138	19,763	17,310	19,131	18,578	20,373

Step 1 of 4 :  

Determine the three-period moving average for the next time period. If necessary, round your answer to one decimal place.

Step 2 of 4 :  

Determine the three-period weighted moving average for the next time period with weights of 3 (most recent), 2 (second latest time period), and 1 (oldest time period). If necessary, round your answer to one decimal place.

Step 3 of 4 :  

Determine the exponential smoothing forecast for the next time period (October - 14) using a smoothing constant of 0.20. If necessary, round your answer to one decimal place.

Step 4 of 4:

Based on the MAPE scores, which forecast is best?

(a) Exponential smoothing, because the MAPE score is lowest.

(b) Three-period moving average, because the MAPE score is lowest.

(c) Three-period moving average, because the MAPE score is highest.

(d) Exponential smoothing, because the MAPE score is highest.

Answer 1

step 1:

Month	Profit(A)	forecast(F)	|A-F|/A
Jan	17123
Feb	17273
Mar	16055
Apr	18138	16817.0	0.0728
May	19763	17155.3	0.1319
Jun	17310	17985.3	0.0390
Jul	19131	18403.7	0.0380
Aug	18578	18734.7	0.0084
Sep	20373	18339.7	0.0998
Oct		19360.7
		total	0.3900
		average(MAPE)	0.0650

three-period moving average for the next time period =19360.7

Step 2 of 4 :  

Month	Profit(A)	forecast(F)	|A-F|/A
Jan	17123
Feb	17273
Mar	16055
Apr	18138	16639.0	0.0826
May	19763	17299.5	0.1247
Jun	17310	18603.3	0.0747
Jul	19131	18265.7	0.0452
Aug	18578	18629.3	0.0028
Sep	20373	18551.0	0.0894
Oct		19567.7
		total	0.4194
		average(MAPE)	0.0699

three-period weighted moving average for the next time period =19567.7

Step 3 of 4 :  

Month	Profit(A)	forecast(F)	|A-F|/A
Jan	17123
Feb	17273	17123	0.0087
Mar	16055	17153.0	0.0684
Apr	18138	16933.4	0.0664
May	19763	17174.3	0.1310
Jun	17310	17692.1	0.0221
Jul	19131	17615.6	0.0792
Aug	18578	17918.7	0.0355
Sep	20373	18050.6	0.1140
Oct		18515.1
		total	0.5252
		average(MAPE)	0.0657

exponential smoothing forecast for the next time period =18515.1

Step 4 of 4:

(b) Three-period moving average, because the MAPE score is lowest.