Question

You must do the necessary calculations in the answer cells. Simply providing a number in the answer cell will not receive any credit.

Part 1: Fill in the pink cells with forecasts. Round off to two decimal points.

Part 1	Demand	3 Period Moving average	5 period moving average	Exponential Smoothing Alpha= .1	Exponential Smoothing Alpha= .4
Day 1	2690.0
Day 2	2700.0			pink	pink
Day 3	2750.0			pink	pink
Day 4	2690.0	pink		pink	pink
Day 5	2780.0	pink		pink	pink
Day 6	2530.0	pink	pink	pink	pink
Day 7	2660.0	pink	pink	pink	pink
Day 8	2520.0	pink	pink	pink	pink
Day 9	2540.0	pink	pink	pink	pink
Day 10	2600.0	pink	pink	pink	pink
Day 11	2700.0	pink	pink	pink	pink
Day 12		pink	pink	pink	pink

Part 2: Fill in the yellow cells with measure of forecast error. Round off to two decimal places.

Period Demand Forecast

1 10316.0 10300.0

2 12443.0 10565.0

3 11717.0 10562.0

4 11035.0 10755.0

5 12173.0 11377.8

6 11015.0 11842.0

7 11039.0 11485.0

8 11934.0 11315.5

9 11972.0 11540.3

10 10518.0 11490.0

	Forecast
CFE	yellow
MAD	yellow
MSE	yellow
MAPE	yellow

Part 3: Answer the questions below. (forecast errors below are based on different data than that shown above.)

	Forecast A	Forecast B	Forecast C
CFE	22	-22	1.5
MAD	11.5	14.5	12.6
MSE	145	169	156
MAPE	0.11	-0.21	0.16

Question 1: Which measure of forecast error is incorrect. Identify the mistake by indicating both the measure of forecast error and the specific forecast (A, B, or C)

Question 2: Which forecast (A, B, or C) has the largest squared errors?

Question 3: Which forecast (A, B, or C) is the least 'biased'?

Grading Rubric

	points possible	points earned
Part 1
3 pd MA	12
5 pd MA	12
ES a=.1	12
ES a=.4	12
Part 2
CFE	7
MAD	7
MSE	7
MAPE	7
Part 3
Q1	8
Q2	8
Q3	8
Total	100	0

Answer 1

Formula sheet

A	B	C	D	E	F	G	H	I
2
3		Part 1:
4
5		n-period simple moving average is is the average value over the previous n periods of time.
6		n-period moving average	=(∑actual values in previous n period )/n
7
8		In exponential smoothening, forecasted value at time t, F(t) in can be written as follows:
9		F(t) = α×Y(t-1)+(1-α)×F(t-1)
10
11		Where Y(t-1) is the actual value at t-1 and F(t-1) is the forecasted value at t-1
12
13		For 0<α<1 and for t=1, F(1)= Y(1)
14
15			Demand	3 Period Moving average	5 period moving average	Exponential Smoothing Alpha= .1	Exponential Smoothing Alpha= .4
16		Day 1	2690
17		Day 2	2700			=0.1*D16+(1-0.1)*D16	=0.4*D16+(1-0.4)*D16
18		Day 3	2750			=0.1*D17+(1-0.1)*G17	=0.4*D17+(1-0.4)*H17
19		Day 4	2690	=SUM(D16:D18)/3		=0.1*D18+(1-0.1)*G18	=0.4*D18+(1-0.4)*H18
20		Day 5	2780	=SUM(D17:D19)/3		=0.1*D19+(1-0.1)*G19	=0.4*D19+(1-0.4)*H19
21		Day 6	2530	=SUM(D18:D20)/3	=SUM(D16:D20)/5	=0.1*D20+(1-0.1)*G20	=0.4*D20+(1-0.4)*H20
22		Day 7	2660	=SUM(D19:D21)/3	=SUM(D17:D21)/5	=0.1*D21+(1-0.1)*G21	=0.4*D21+(1-0.4)*H21
23		Day 8	2520	=SUM(D20:D22)/3	=SUM(D18:D22)/5	=0.1*D22+(1-0.1)*G22	=0.4*D22+(1-0.4)*H22
24		Day 9	2540	=SUM(D21:D23)/3	=SUM(D19:D23)/5	=0.1*D23+(1-0.1)*G23	=0.4*D23+(1-0.4)*H23
25		Day 10	2600	=SUM(D22:D24)/3	=SUM(D20:D24)/5	=0.1*D24+(1-0.1)*G24	=0.4*D24+(1-0.4)*H24
26		Day 11	2700	=SUM(D23:D25)/3	=SUM(D21:D25)/5	=0.1*D25+(1-0.1)*G25	=0.4*D25+(1-0.4)*H25
27		Day 12		=SUM(D24:D26)/3	=SUM(D22:D26)/5	=0.1*D26+(1-0.1)*G26	=0.4*D26+(1-0.4)*H26
28