The following table shows the actual demand observed over the last 11 years This

Question

The following table shows the actual demand observed over the last 11 years This exercise contains arty parts b, c, and d. Using the 3-year moving average, provide the forecast from periods 4 through 12 (round your responses to one decimal place) Using the 3-year weighted moving average with weights 0 10. 0.35. and 0.55 using 0.55 for the most recent period, provide the forecast from periods 4 through 12 (round your responses to two decimal places) Mean absolute deviation for the forecast developed using the 3 year moving average is 2.38 and for the 3 year weighted moving average is 2.36. Based on this information, the better forecast is achieved using the approach.

Explanation / Answer

b)

Moving average for year 4 = (7+10+6) /3 = 7.7

Moving average for year 5 = (10+6+9) /3 = 8.3

Similarly, calculated for all years

c)

Weighted moivng average for year 4= 7* .10 + 10 * 0.35 + 6 *0.55 = 7.5

Weighted moivng average for year 5 = 10 .10 + 6 * 0.35 + 9 *0.55 = 8.1

Similarly, calculated for all years

Year Demand Forecast 1 7 2 10 3 6 4 9 7.7 5 11 8.3 6 9 8.7 7 13 9.7 8 13 11.0 9 10 11.7 10 9 12.0 11 6 10.7 12 8.3

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