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

Question

Here are the actual tabulated demands for an ltem for a nine-month period (January through September). Your supervisor wants to test two forecasting methods to see which method was better over this perio 128 March 164 155 173 135 133 August a. Forecast April through September using a three-month moving average. (Round your answers to moving averaga. (Round you answers to 2 decimal places.) Moving Average b, Use simple exponential smoothing with an elpha of 0 10 to estimate Apri through September, using the average of January through March as the initial forecast for April (Round your answers to 2 decimal places.) Exponential

Explanation / Answer

a. F(April) = (109+128+145)/3

= 127.33

F(May) = (128+145+164)/3

= 145.67

F(June) = (145+164+155)/3

= 154.67

F(July) = (164+155+173)/3

= 164

F(August) = (155+173+135)/3

= 154.33

F(September) = (173+135+133)/3

= 147

b. F(April) = (109+128+145)/3

=127.33

F(May) = 0.1*164 + 0.9*127.33

= 131

F(June) = 0.1*155 + 0.9*130.997

= 133.40

F(July) = 0.1*173 + 0.9*133.3973

= 137.36

F(August) = 0.1*135 + 0.9*137.35757

= 137.12

F(September) = 0.1*133 + 137.12*0.9

= 136.71

C-1.

Three Month Moving Average

MAD = |36.67 + 9.33 + 18.33 + 29 + 21.33 + 11|/6

= 20.94

Exponential Smoothing

MAD = |36.67 + 24 + 39.6 + 2.36 + 4.12 + 0.71|/6

= 17.91

C-2. based on MAD Exponential smoothing produce better forecasts.

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