Given the series of demand data below Period : 1 2 3 4 5 6 7 8 9 10 Demand: 43 3

Question

Given the series of demand data below

Period :     1     2     3     4     5     6     7     8     9     10

Demand:   43   31   52 44    23   48   40   39   30    40

A. Calculate the forecasts for periods 7 through 11 using moving average models with n = 2, n = 4, and n = 6

Week          n=2          n=4          n=6

7

8

8

10

11

B. Calculate the bias and MAD for each set of forecasts

                  Moving Average Forecast

              n=2          n=4          n=6

Bias:

MAD:

C. If last period

C. If last period

Explanation / Answer

Definition of 'Moving Average - MA' An indicator frequently used in technical analysis showing the average value of a security's price over a set period. Moving averages are generally used to measure momentum and define areas of possible support and resistance. Moving averages are used to emphasize the direction of a trend and to smooth out price and volume fluctuations, or "noise", that can confuse interpretation. Typically, upward momentum is confirmed when a short-term average (e.g.15-day) crosses above a longer-term average (e.g. 50-day). Downward momentum is confirmed when a short-term average crosses below a long-term average. for example The ABC Floral Shop sold the following number of geraniums during the last 2 weeks: Day Demand Day Demand 1 200 8 150 2 134 9 182 3 157 10 197 4 165 11 136 5 177 12 163 6 125 13 157 7 146 14 169 In table below last two columns are forecasts: Day_____Data______F:3MA______ F:5MA 1_______200_______ xx.xx _______ xx.x 2_______134_______ xx.xx _______ xx.x 3_______157_______ xx.xx _______ xx.x 4_______165_______163.67_______ xx.x 5_______177_______152.00_______ xx.x 6_______125_______166.33_______166.6 7_______146_______155.67_______151.6 8_______150_______149.33_______154.0 9_______182_______140.33_______152.6 10______197_______159.33_______156.0 11______136_______176.33_______160.0 12______163_______171.67_______162.2 13______157_______165.33_______165.6 14______169_______152.00_______167.0 15______xxx_______163.00_______164.4 Thus for day 15 forecasts are 3MA=163 and 5MA=164

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