Here are the actual tabulated demands for an item for a nine-month period (Janua

Question

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 January February March April May June July August September ACTUAL 110 130 150 170 160 180 140 130 140 a. Forecast April through September using a three-month moving average Three-Month Moving Average Month ril May June July August September b. Use simple exponential smoothing with an alpha of 0.3 to estimate April through September, using the average of January through March as the initial forecast for April. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Exponential Smoothing Month April May June July August September

Explanation / Answer

Actual

3 month MA

Exponential smoothening

Jan

110

Feb

130

Mar

150

Apr

170

130

130

May

160

150

142

Jun

180

160

147.4

Jul

140

170

157.18

Aug

130

160

152.026

Sep

140

150

145.4182

Exponential smoothening seems to be the best option because of less variation from actuals

Actual

3 month MA

Exponential smoothening

Jan

110

Feb

130

Mar

150

Apr

170

130

130

May

160

150

142

Jun

180

160

'=C6*0.3+(1-0.3)*E6

147.4

Jul

140

170

157.18

Aug

130

160

152.026

Sep

140

150

145.4182

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