Question

Please answer the following:

1. United Dairies, Inc., supplies milk to several independent grocers throughout Dade County, Florida. Managers at United Dairies want to develop a forecast of the number of half gallons of milk sold per week. Sales data for the past 12 weeks are:

Week	Sales
1	2,750
2	3,100
3	3,250
4	2,800
5	2,900
6	3,050
7	3,300
8	3,100
9	2,950
10	3,000
11	3,200
12	3,150

.

1. Show the exponential smoothing forecasts using α = 0.1.
   1. Applying the MSE measure of forecast accuracy, would you prefer a smoothing constant of α=0.1 or α= 0.2 for the United Dairies sales time series?
   2. Are the results the same if you apply MAE as the measure of accuracy?
   3. What are the results if MAPE is used?

2.    Use exponential smoothing with a α = 0.4 to develop a forecast of demand for week 13. What is the resulting MSE?

           

Answer 1