A motorcycle dealer wants to be able to accurately forecast US demand for their
ID: 3227301 • Letter: A
Question
A motorcycle dealer wants to be able to accurately forecast US demand for their best-selling
motorcycle during the next month. Because the manufacturer is in Asia, it is difficult to send
motorcycles back or reorder if the proper number is not ordered a month ahead. From sales records,
the dealer has accumulated the following data for the past year.
Month Motorcycle Sales
January 9
February 7
March 10
April 8
May 7
June 12
July 10
August 11
September 12
October 10
November 14
December 16
a. Compute a three-month moving average forecast of demand for April through January (of the next
year).
b. Compute a five-month moving average forecast for June through January.
c. Compare the two forecasts computed in parts a and b, using MAD. Which one should the dealer use
for January of the next year? Justify your answer.
Please show your answers in an excel sheet. Thanks!
Explanation / Answer
a)
b)
c) as MAD is higher for 5 month moving average, we should use 3 month moving average.
please reply
3 month Month sales(A) Forecast(F) |A-F| January 9 February 7 March 10 April 8 8.67 0.67 May 7 8.33 1.33 June 12 8.33 3.67 July 10 9.00 1.00 August 11 9.67 1.33 September 12 11.00 1.00 October 10 11.00 1.00 November 14 11.00 3.00 December 16 12.00 4.00 January 13.33 Total 17.00 MAD= mean 1.89Related Questions
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