Question

In: Statistics and Probability

Here are the actual tabulated demands for an item for a nine-month period (January through September)....

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.

MONTH ACTUAL
January 124
February 124
March 152
April 172
May 156
June 176
July 144
August 128
September 142

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

b. Use simple exponential smoothing with an alpha of 0.30 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.)

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

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

  • Exponential smoothing.

  • Three-month moving average.

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Expert Solution

orchestra answered 1 year ago
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