Your manager asks you to forecast demand for a popular product ABC in your firm.
ID: 3049459 • Letter: Y
Question
Your manager asks you to forecast demand for a popular product ABC in your firm. She
has provided you with the following historical demand data for the first six months in 2018 (Assume
that you are at the end of June 2018) and would like you to answer her questions below.
Month | Actual demand
January | 54
February | 56
March | 60
April | 68
May | 66
June | 73
Calculate the one-step-ahead forecast for July 2018 and two-step-ahead forecast for August 2018 using the adjusted exponential smoothing method with F1 = 54, T1 = 0, and a) = = 0.20. Calculate its MAD. b) the optimal and minimizing MAD. Calculate its MAD.
Explanation / Answer
a ) Using alpha = beeta = 0.20, Forecast for july = 65.34 and August = 66.86 . MAD value = 6.33
b) At alpha = 0.5, beeta=1.1 , MAD Value is less which is equal to 3.088
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